This paper presents a dynamic model on lobbying. The interactions between two competing lobbies, who attempt to influence regulations and legislation, are modeled as a differential game. The author considers for this game first a time-consistent and then a subgame-perfect equilibrium (in linear Markov strategies). The subgame-perfect equilibrium lowers considerably lobbying activity and expenses. This provides a partial explanation of the puzzle that rent-seeking expenses are often small compared with the prize sought. Copyright 1994 by Kluwer Academic Publishers
