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Informational and Monetary Lobbying: Expert Politicians, Good Decisions?

Authors


  • Mike Felgenhauer, Department of Economics, University of Mannheim 68131, Germany (felgenha@rumms.uni-mannheim.de).

  • I thank Ernst-Ludwig von Thadden, Matthias Dahm, Hans Peter Grüner, Elisabeth Schulte, Heiner Schumacher, Tri Vi Dang, Wioletta Dziuda, Simon Lörtscher, the seminar participants in Mannheim and at the NASM 2009 in Boston, an anonymous referee and an associate editor for useful comments and suggestions.

Abstract

This paper finds that the strategic interaction between opposing interest groups depends on the decision maker's expertise. If the costs to provide information are sufficiently low, then the decision quality is nonmonotonic in the politician's expertise. An expert may attract less informational lobbying and make worse decisions than a politician who is ex ante endowed with less information and therefore less predisposed to a particular policy.

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