地域学研究
Online ISSN : 1880-6465
Print ISSN : 0287-6256
ISSN-L : 0287-6256
A Long-Run Analysis of Complementary and Substitutive Lobbying Activity in a Regulated Market
Welfare Implications of Negative and Positive Spillover Effects
SHINJI YANEMAKOTO OKAMURA
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2004 年 34 巻 2 号 p. 89-101

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We present a two-stage noncooperative game model which contains both complementary and substitutive lobbying activity and a regulatory body with an extraordinary degree of discretionary power. We establish the following results: (1) While a substitutive lobbying firm can reduce its lobbying expenses more than a complementary firm, the substitutive lobbying firm's quota is always smaller than that of the complementary firm. (2) The equilibrium pure-tax rate is the same in the substitutive case as in the complementary. (3) The regulator's utility in the complementary case exceeds the utility in the substitutive case, and whether the substitutive firm's profit is higher than the complementary one's depends on the tax rate and the degree of lobbying spillover effects. (4) The free-entry equilibrium in the substitutive case attains the second-best allocation. (5) The equilibrium number of the firms in the complementary free-entry equilibrium becomes excessive or insufficient, depending on how the tax system is constructed.

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© The Japan Section of the Regional Science Association International
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