Entry and asymmetric lobbying
Subtitle: why governments pick losers
By: Richard E. Baldwin and Frédéric Robert-Nicoud
Contributors: Robert-Nicoud, Frédéric; London School of Economics and Political Science. Centre for Economic Performance
Series: CEP discussion paper -- no. 791
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Published: 2007
Place of publication: London
Language: eng
Format: [electronic resource] :
Description: Governments frequently intervene to support domestic industries, but a surprising amount of this support goes to ailing sectors. We explain this with a lobbying model that allows for entry and sunk costs. Specifically, policy is influenced by pressure groups that incur lobbying expenses to create rents. In expanding industries, entry tends to erode such rents, but in declining industries, sunk costs rule out entry as long as the rents are not too high. This asymmetric appropriability of rents means losers lobby harder. Thus it is not that government policy picks losers, it is that losers pick government policy.
Notes: Title from publisher's abstract page (viewed on July 6, 2007).

"May 2007."

Includes bibliographical references.

Also available in print.

System requirements: Adobe Acrobat Reader.

Mode of access: World Wide Web.