We consider a situation in which two groups contest group-specific public goods. Each member of the group may have a different valuation of the prize. Our model can be interpreted as the contestants' cost of lobbying efforts being non-linear, or the returns to their efforts being decreasing. We show that the level of free-riding depends on the return of the investment. We consider the situation under which one group initiates a contest to which different individuals and/or groups can be added. The question we pose is what is the optimal structure of additional groups?
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Acknowledgements We thank Ira Gang and Laura Shock for helpful comments and suggestions. We are grateful to two anonymous referees for their helpful and constructive comments. Financial support from the Adar Foundation of the Economics Department of Bar-Ilan University is gratefully acknowledged.
- Orchestration of interest groups
- Public good
- Rent seeking