Symmetric vs Asymmetric Equilibria and Stochastic Stability in a Dynamic Game of Legislative Lobbying

Abstract : We study a 2-players stochastic dynamic symmetric lobbying differential game. Players have opposite interests; at any date, each player invests in lobbying activities to alter the legislation in her own benefit. The payoffs are quadratic and uncertainty is driven by a Wiener process. We prove that while a symmetric Markov Perfect Equilibrium (MPE) always exists, an asymmetric MPE only emerges when uncertainty is large enough. In the latter case, the legislative state converges to a stationary invariant distribution. Interestingly enough, the implications for the rent dissipation problem are much more involved than in the deterministic counterpart: the symmetric MPE still yields a limited social cost while the asymmetric may yield significant losses. We also characterize the most likely asymptotic state, in particular regarding the level of uncertainty.
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Pré-publication, Document de travail
2018
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https://halshs.archives-ouvertes.fr/halshs-01181214
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Soumis le : mercredi 10 janvier 2018 - 11:28:19
Dernière modification le : jeudi 1 février 2018 - 17:37:55
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  • HAL Id : halshs-01181214, version 2

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Raouf Boucekkine, Fabien Prieur, Benteng Zou. Symmetric vs Asymmetric Equilibria and Stochastic Stability in a Dynamic Game of Legislative Lobbying . 2018. 〈halshs-01181214v2〉

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