28.8 Policy Application: Interest Groups, Transactions Costs, and Vote Buying: Suppose that a legislature has to vote
Question:
28.8 Policy Application: Interest Groups, Transactions Costs, and Vote Buying: Suppose that a legislature has to vote for one of two mutually exclusive proposals: proposal A or B. Two interest groups are willing to spend money on getting their preferred proposal implemented, with interest group 1 willing to pay up to y A
to get A implemented and interest group 2 willing to pay up to y B
to get proposal B passed. Both interest groups get payoff of zero if the opposing group’s project gets implemented. Legislators care first and foremost about campaign contributions and will vote for the proposal whose supporters contributed more money, but they have a weak preference for project B in the sense that they will vote for B if they received equal amounts from both interest groups.
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