Analysis on Lobbying of Multiple Interest Groups under Complete Information

This paper analyzes the impact of policymakers’ self-interest in the lobbying process between self-interested policymakers and multiple special interest groups. First, there exists an informative lobbying equilibrium (PBE) in which informative lobbying can increase social welfare, and the more moderately biased interest group can free-ride on the benefit of lobbying by more extremely biased interest group. Second, informative lobbying may increases social welfare, and also raise the utility level of the special interest groups(SIGs) and the policymaker(PM)’s payoff if a condition of PM’s time cost holds. Complete information about SIG’s policy biases allows the PM to determine an access fee equal to the maximum willingness to pay(WTP) of a more radical SIG, and allows the PM to infer the real state when there is no lobbying. Eventually, it results in the success of policy planning.