Strategic restraint in contests

Gil S. Epstein, Shmuel Nitzan

Research output: Contribution to journalArticlepeer-review

37 Scopus citations

Abstract

Economic policy is modelled as the outcome of a (political) game between two interest groups. The possible ex-post (realized) outcomes in the game correspond to the proposed policies. In the literature policy proposals are exogenous. We extend such games by allowing the endogenous determination of the proposed policies. In a first stage the groups decide which policy to lobby for and then, in a second stage, engage in a contest over the proposed policies. Our main result is that competition over endogenously determined policies induces strategic restraint that reduces polarization and, in turn, wasteful lobbying activities.

Original languageEnglish
Pages (from-to)201-210
Number of pages10
JournalEuropean Economic Review
Volume48
Issue number1
DOIs
StatePublished - Feb 2004

Keywords

  • Endogenous lobbying targets
  • Interest groups
  • Polarization
  • Voluntary restraint

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