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Procurement Lobbying

Author

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  • Roberto Burguet

    (University of Central Florida)

  • Jozsef Sakovics

    (Universitat de les Illes Balears and School of Economics, University of Edinburgh)

Abstract

We study lobbying in the context of (competitive) procurement. We propose a tractable, Bayesian model to analyze lobbying-effort and pricing decisions. Lobbying conveys information, even if biased, to the buyer. This allows the buyer to improve the expected value of the match, but it also increases product di§erentiation, and thus raises prices. When inexpensive, lobbying always happens in equilibrium, even if it is often not profitable. If he anticipates it, the buyer always benefits from a monopolistís lobbying, but he might be hurt by the lobbying of two competing sellers.

Suggested Citation

  • Roberto Burguet & Jozsef Sakovics, 2022. "Procurement Lobbying," Edinburgh School of Economics Discussion Paper Series 306, Edinburgh School of Economics, University of Edinburgh.
    • Handle: RePEc:edn:esedps:306
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