Inefficient equilibria in lobbying

Lobbying is often represented as a common agency game. Common agency games typically have multiple equilibria. One class of equilibria, called truthfu l, has been identified by Bernheim and Whinston [Quarterly Journal of Econo mics 1986;101(1):1-31]. In this paper, we identify another class of equilib ria, which we call natural, in which each principal offers a positive contr ibution on at most one alternative. We run an experiment on a common agency game for which the two equilibria predict a different equilibrium alternat ive. The alternative predicted by the natural equilibrium is chosen in 65% of the matches, while the one predicted by the truthful equilibrium is chos en in less than 5% of the matches. (C) 2001 Elsevier Science BY All rights reserved.