Show them your teeth first! A game-theoretic analysis of lobbying and presure

This paper investigates the choice of an interest group between lobbying words and pressure actions in order to influence a policymaker. Both lobbying and pressure are modeled as strategic means of transmitting information that is relevant to the policymaker. However, only pressure is directly costly to the policymaker. The interaction between the interest group and the policymaker is framed as a repeated signaling game. In equilibrium pressure--in contrast to lobbying--only occurs when the interest group s reputation is sufficiently low, and always improves its reputation. It is shown that repeated lobbying cannot completely substitute for pressure, and that the interest group may be forced to sustain its reputation through lobbying. We conclude that pressure is typically used to build up a reputation, lobbying to maintain a reputation.