9: Interest Groups

Question 1

How can interest groups influence policy?

Answer 1

• provide resources
• provide information
• exercise market power

Question 2

Pluralist theory on interest groups

Answer 2

Government balance between the various interest groups in a society

Question 3

What is the social dilemma of collective action for interes groups?

Answer 3

collective action is a public good (free riding)
→ small groups are more likely to organize

Question 4

What is rent seeking?

Answer 4

Expenditure to capture ‘artificial’ rents (e.g. monopoly rights)
→ socially wastfull

Question 5

What are the results of the contest game model

Footnote
n players invest x_i to win prize R

Answer 5

total investments of (n-1)/n*R are made

(approaches R with rising number of players)

Question 6

What issues arise when the interest of a politician and the interest of the lobby differ (and the lobby informs the politician)

Answer 6

The larger the difference, the less precise credible information can be

Question 7

What happens if there are multiple lobbyists providing information?

Answer 7

All are better of