Roberto Burguet an József Sákovics
MKE-WP-39220
- Sakovics
- 1
We study lobbying as a seller's ploy to affect the buyer's learning process about the value of a singular good that he wishes to procure. In particular, we argue that a lobbying seller strategically distorts "soft" rather than private information. Our innovation is to model this as the seller "jamming" the buyer's signal -- not just by shifting its mean, but -- by skewing (increasing the third moment of) its distribution. An unobserved marginal increase in lobbying effort expands demand, thus, unless too expensive, the seller always lobbies, no matter how suspicious the buyer is. Crucially, even when correctly anticipated (in equilibrium), lobbying increases the price elasticity of the buyer's demand. This leads to a lower equilibrium price and increased efficiency. In the (skew-)normal learning model, in equilibrium the seller gains, the buyer loses as a result of lobbying. Nonetheless, the information gleaned during the process keeps the buyer from refusing to engage in it.