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Competing For Loyalty: The Dynamics of Rallying Support

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  • Iaryczower, M
  • Oliveros, S

Abstract

We consider a class of dynamic collective action problems in which either a single principal or two competing principals vie for the support of members of a group. We focus on the dynamic problem that emerges when agents negotiate and commit their support to principals sequentially. A danger for the agents in this context is that a principal may be able to succeed by exploiting competition among members of the group. Would agents benefit from introducing competition between opposing principals? We show that when principals? policies provide value to the agents, competition actually reduces agents? welfare.

Suggested Citation

  • Iaryczower, M & Oliveros, S, 2015. "Competing For Loyalty: The Dynamics of Rallying Support," Economics Discussion Papers 14459, University of Essex, Department of Economics.
    • Handle: RePEc:esx:essedp:14459
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    Cited by:

    1. Johannes Münster & Markus Reisinger, 2021. "Sequencing Bilateral Negotiations with Externalities," ECONtribute Discussion Papers Series 096, University of Bonn and University of Cologne, Germany.
    2. Louis-Sidois, Charles & Musolff, Leon Andreas, 0. "Buying voters with uncertain instrumental preferences," Theoretical Economics, Econometric Society.
    3. Iaryczower, Matias & Oliveros, Santiago, 2016. "Power brokers: Middlemen in legislative bargaining," Journal of Economic Theory, Elsevier, vol. 162(C), pages 209-236.
    4. Meirowitz, Adam & Pi, Shaoting, 2022. "Voting and trading: The shareholder’s dilemma," Journal of Financial Economics, Elsevier, vol. 146(3), pages 1073-1096.
    5. Suchan Chae & Seho Kim, 2019. "The effects of third-party transfers in sequential anchored bargaining," International Journal of Game Theory, Springer;Game Theory Society, vol. 48(1), pages 143-155, March.
    6. Chen, Ying & Zápal, Jan, 2022. "Sequential vote buying," Journal of Economic Theory, Elsevier, vol. 205(C).

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    More about this item

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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