Protection, lobbying, and market structure

We look at a model of lobbying by oligopolistic industry where firms alloca te resources between lobbying and internal cost-reducing activities. We ask the following questions: (i) if firms differ with respect to comparative a dvantage in lobbying. what is the equilibrium allocation of resources betwe en lobbying and cost-reducing activities? (ii) Can lobbying opportunities r everse the profitability ranking among firms? (iii) tinder what condition i s the conventional wisdom that highly concentrated industries tend to obtai n more protection valid? The answers depend on various measures of comparat ive advantage in lobbying and on the demand curve. (C) 2001 Elsevier Scienc e B.V. All rights reserved.