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Informational Lobbying and Competition for Access

Cotton, Christopher (2007): Informational Lobbying and Competition for Access.

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Abstract

In competition for access, interest groups provide contributions to a politician and those that provide the highest contributions win access. Groups with access present information that may influence the politician's beliefs about the socially optimal policy. Because equilibrium contributions are chosen endogenously, the politician learns about the information quality of all interest groups, even when he grants access to only some of the groups. Contribution limits reduce the signaling power of the equilibrium contributions, resulting in a less informed politician, and strictly reducing expected social welfare.

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