TY - JOUR
T1 - Competing for loyalty
T2 - The dynamics of rallying support
AU - Iaryczower, Matias
AU - Oliveros, Santiago
PY - 2017/10
Y1 - 2017/10
N2 - We consider a class of dynamic collective action problems in which either a single principal or two competing principals vie for the support of members of a group. We focus on the dynamic problem that emerges when agents negotiate and commit their support to principals sequentially. We show that competition reduces agents' welfare with public goods, or if and only if there are positive externalities on uncommitted agents, and increases agents' welfare with public bads. We apply the model to the study of corporate takeovers, vote buying, and exclusive deals.
AB - We consider a class of dynamic collective action problems in which either a single principal or two competing principals vie for the support of members of a group. We focus on the dynamic problem that emerges when agents negotiate and commit their support to principals sequentially. We show that competition reduces agents' welfare with public goods, or if and only if there are positive externalities on uncommitted agents, and increases agents' welfare with public bads. We apply the model to the study of corporate takeovers, vote buying, and exclusive deals.
UR - http://www.scopus.com/inward/record.url?scp=85030670470&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85030670470&partnerID=8YFLogxK
U2 - 10.1257/aer.20150755
DO - 10.1257/aer.20150755
M3 - Article
AN - SCOPUS:85030670470
SN - 0002-8282
VL - 107
SP - 2990
EP - 3005
JO - American Economic Review
JF - American Economic Review
IS - 10
ER -