Sébastien Rouillon edited sectionThe_benchmark.tex  over 8 years ago

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\bigskip{}  The new product needs to be officially approved before lobby $I$ can market it. Two ways of doing so will be considered and compared below. In the first one, the regulator simply decides according to his prior beliefs using a cost-benefit analysis. In the second one, the regulator's decision depends on the two lobbyists' efforts, according  to a simultaneous Tullock contest (Tullock, 1980). Formally, lobbies $I$ and $E$ simultaneously bid nonnegative values, respectively denoted by $x$ and $y$, and the regulator approves the new product with the probability  % Ici, il faut annoncer que c'est le cas r=1 qui est considéré. probability\footnote{This contest success function is a special case of $\pi\left(x,y\right)=\frac{x^{r}}{x^{r}+y^{r}}$, when $r=1$, which is often referred to as the "lottery contest" in the literature (Konrad, 2007).}  \begin{equation}  \pi\left(x,y\right)