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On the Efficiency of By-Product Lobbying

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  • Mayer, Wolfgang

Abstract

To explain the existence of large lobbying groups, Olson proposes a "by-product theory": large lobbies are by-products of industry associations that operate as monopolists in private goods markets. This paper explicitly formulates Olson's by-product theory of lobby funding and examines its efficiency as a funding method. Lobbying efficiency is enhanced by the association's ability to price-discriminate. Price discrimination, in turn, is facilitated by the association's superior knowledge of its members' characteristics. The paper also examines the relationship between lobby strength and industry size, as well as the question of "who exploits whom" under by-product lobbying. Copyright 2002 by Kluwer Academic Publishers

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  • Mayer, Wolfgang, 2002. "On the Efficiency of By-Product Lobbying," Public Choice, Springer, vol. 112(3-4), pages 275-292, September.
    • Handle: RePEc:kap:pubcho:v:112:y:2002:i:3-4:p:275-92
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    Cited by:

    1. Paul Pecorino, 2015. "Olson’s Logic of Collective Action at fifty," Public Choice, Springer, vol. 162(3), pages 243-262, March.
    2. Pecorino, Paul, 2010. "By-product lobbying with rival public goods," European Journal of Political Economy, Elsevier, vol. 26(1), pages 114-124, March.

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