Astroturf : Interest Group Lobbying and Corporate Strategy

We study three corporate nonmarket strategies designed to influence the lobbying behavior of other special interest groups: (1) Astroturf, in which the firm covertly subsidizes a group with similar views to lobby when it normally would not; (2) the bear hug, in which the firm overtly pays a group to alter its lobbying activities; and (3) self-regulation, in which the firm voluntarily limits the potential social harm from its activities. All three strategies reduce the informativeness of lobbying, and all reduce the payoff of the public decision-maker. We show that the decision-maker would benefit by requiring the public disclosure of funds spent on Astroturf lobbying but that the availability of alternative influence strategies limits the impact of such a policy