We examine the incentives of an interest group to provide verifiable policy-relevant information to a political decision-maker and to exert political pressure on her. We show that both lobbying instruments are interdependent. In our view information provision is a risky attempt to affect the...

Since campaign finance reform is usually motivated by the concern that existing legislation can not effectively prevent campaign contributions to ‘buy favors’, this paper assumes that contributions influence political decisions. But, given that it is also widely recognized that interest...

We present a simple model of elections in which experts with special interests endorse candidates and endorsements are observed by the voters. We show that the equilibrium election outcome is biased towards the experts' interests even though voters know the distribution of expert interests and...

In models of non-deterministic contest, players exert irreversible effort in order to increase their probability of winning a prize. The most prominent functional form of the win probability in the literature is the so-called “logit” contest success function. We provide a simple...

This paper presents a dynamic model of election, government formation, and legislation in a parliamentary democracy with proportional representation in which the policy chosen in one period becomes the status quo for the next period. The electorate votes strategically by taking into account the...

Diermeier and Fong (2008a) recently proposed a legislative bargaining model with reconsideration in the context of a distributive policy environment. In this paper we prove general existence and necessary conditions for pure-strategy stationary equilibria for any finite policy space and...

The arrival of new, unfamiliar, investment opportunities is often associated with "exuberant" movements in asset prices and real economic activity. During these episodes of high uncertainty, financial markets look at the real sector for signals about the profitability of the new investment...

In recent years there has been a growing interest in macro models with heterogeneity in information and complementarity in actions. These models deliver promising positive properties, such as heightened inertia and volatility. But they also raise important normative questions, such as whether...

We consider discriminatory auctions for multiple identical units of a good. Players have private values, possibly for multiple units. None of the usual assumptions about symmetry of players' distributions over values or of their equilibrium play are made. Because of this, equilibria will...

Contracts adopted with later renegotiation in mind may take simple forms. In a principal-agent model, if renegotiation may occur after the agent chooses efforet, the principal protects against unfavorable renegotiation by "selling the project" to the agent via a sales contract. If only singleton...