Lobbying, Contingent Fees, and Information Transmission: An Economic Analysis

Abstract:     
This paper attempts to add greater insight into the study of political influence. It analyzes contracts for lobbying by first placing them into their proper political economy context as well as analyzing them in a modified information transmission mechanism. The main contributions include a more realistic three party lobbying model, new constraints for lobbying equilibria, optimal contracts, and a real world context for the theoretical results. Contingency contracts are found to facilitate information transmission and necessary for resource constrained lobbyists to transmit information to decision makers; however, their reliance on observability of cost proves a cumbersome hurdle. The thesis concludes with policy recommendations in light of the findings.

Number of Pages in PDF File: 62

Keywords: Lobbying, information transmission, contingency fees

JEL Classification: D72, D78, D83

working papers series