During the 1990s, the Food and Drug Administration (FDA) launched preliminary efforts to convince Congress to grant the FDA the authority to regulate the manufacture and sale of cigarettes. FDA officials argued that it should have this power because nicotine, a key ingredient in cigarettes, is an addictive drug. Initially, tobacco companies unanimously responded by denying that nicotine is addictive.

In 2003, Phillip Morris, the manufacturer of the top-selling brand, Marlboro, began lobbying to be regulated by the FDA. Regulation, the company decided, would improve the public image of cigarettes. After all, if the company could market cigarettes with “FDA Approved” printed on the package, more people might be willing to consume cigarettes. In addition, the company reasoned, a pro-regulation position would help it gain favorable treatment from regulators if cigarette manufacturing does eventually become a regulated industry. Favorable treatment from regulators might, in turn, cement Marlboro’s position as the number one brand.

Why might a firm that is particularly cooperative with its regulators have a good chance of “capturing” its regulators?