Entry and asymmetric lobbying
why governments pick losers
We couldn't estimate the reading time for this book.
Author
Contributions
- Robert-Nicoud, Frédéric - Contributor
- London School of Economics and Political Science. Centre for Economic Performance - Contributor
Publication
2007 - Centre for Economic Performance, London School of Economics and Political Science, London, England
Language
English
Word Count
0 words, Guess
Page Count
0 pages
Physical Format
Electronic resource
Identifiers
- Library of Congress Control Number2007618492
- Open LibraryOL31800847M
Classifications
- LCCHC10
Description
Governments frequently intervene to support domestic industries, but a surprising amount of this support goes to ailing sectors. We explain this with a lobbying model that allows for entry and sunk costs. Specifically, policy is influenced by pressure groups that incur lobbying expenses to create rents. In expanding industries, entry tends to erode such rents, but in declining industries, sunk costs rule out entry as long as the rents are not too high. This asymmetric appropriability of rents means losers lobby harder. Thus it is not that government policy picks losers, it is that losers pick government policy.
Subjects
Series Statement
- CEP discussion paper -- no. 791
Links
Reader Reviews
No reviews yet for this book.
Be the first to share your thoughts!