Astroturf: Interest Group Lobbying and Corporate Strategy

37 Pages Posted: 2 Nov 2004

See all articles by Thomas P. Lyon

Thomas P. Lyon

University of Michigan, Stephen M. Ross School of Business

John W. Maxwell

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy; Indiana University, Department of Economics; Richard Ivey School of Business

Abstract

We study three corporate nonmarket strategies designed to influence the lobbying behavior of other special interest groups: (1) Astroturf, in which the firm covertly subsidizes a group with similar views to lobby when it normally would not; (2) the bear hug, in which the firm overtly pays a group to alter its lobbying activities; and (3) self-regulation, in which the firm voluntarily limits the potential social harm from its activities. All three strategies reduce the informativeness of lobbying, and all reduce the payoff of the public decision-maker. We show that the decision-maker would benefit by requiring the public disclosure of funds spent on Astroturf lobbying but that the availability of alternative influence strategies limits the impact of such a policy.

Suggested Citation

Lyon, Thomas P. and Maxwell, John W., Astroturf: Interest Group Lobbying and Corporate Strategy. Available at SSRN: https://ssrn.com/abstract=605178

Thomas P. Lyon (Contact Author)

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States
734-615-1639 (Phone)

John W. Maxwell

Indiana University - Kelley School of Business - Department of Business Economics & Public Policy ( email )

Department of Business Economics and Public Policy
Kelley School of Business, Indiana University
Bloomington, IN 47405
United States
812-855 9219 (Phone)
812-855 3354 (Fax)

HOME PAGE: http://johnwmaxwell.com

Indiana University, Department of Economics ( email )

Wiley Hall
Bloomington, IN
United States

Richard Ivey School of Business ( email )

The University of Western Ontario
1151 Richmond Street North
London, Ontario N6A3K7
Canada
5198502439 (Phone)
5198502306 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
13
Abstract Views
1,708
PlumX Metrics