Inefficient equilibria in lobbying

Lobbying is often represented as a common agency game. Common agency games typically have multiple equilibria. One class of equilibria, called truthful, has been identified by Bernheim and Whinston [Quarterly Journal of Economics 1986;101(1):1‐31]. In this paper, we identify another class of equilibria, which we call natural, in which each principal offers a positive contribution on at most one alternative. We run an experiment on a common agency game for which the two equilibria predict a different equilibrium alternative. The alternative predicted by the natural equilibrium is chosen in 65% of the matches, while the one predicted by the truthful equilibrium is chosen in less than 5% of the matches. © 2001 Elsevier Science B.V. All rights reserved.

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