Governments often establish economic policy in response to political pressure by interest groups. Since these groups' political activities may alter prices, economies so affected cannot be characterized by perfect competition. We develop a model of a "lobbying economy" in which consumers' choice...

A model of expected utility maximization and a stochastic health production function are used to show how consumer's beliefs, the certainty of beliefs, and the presence of information affects demand for goods as they are driven by the demand for health. Then, it is shown that competitive markets...