Quarterly Journal of Political Science > Vol 7 > Issue 2

The Industrial Organization of Private Politics

David P. Baron, Stanford University, baron_david@gsb.standord.edu
 
Suggested Citation
David P. Baron (2012), "The Industrial Organization of Private Politics", Quarterly Journal of Political Science: Vol. 7: No. 2, pp 135-174. http://dx.doi.org/10.1561/100.00011065

Published: 06 Apr 2012
© 2012 D. P. Baron
 
Subjects
Political economy,  Environmental politics,  Formal modelling,  Interest groups
 

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In this article:
Overview
Confrontational Private Politics
Cooperative Private Politics
Moderates, Radicals, and the Selection of a Strategy
The Demand Side: Targets
Matching
Complementarity in the Matching Market
Conclusions
Appendix A
Appendix B
References

Abstract

Private politics social pressure is led by social activists who use confrontational and cooperative strategies to induce firms to provide social benefits. A confrontational activist demands that a firm change its practices and threatens a harmful campaign if it does not change. A cooperative activist uses its expertise to identify benefits from a change in practices or provides external legitimacy for a firm. The greater the threat from a confrontational activist the more aggressively the potential targets compete for an engagement with the cooperative activist. If firms would reject the demands of the confrontational activist, the cooperative activist chooses a socially responsible firm over a profit-maximizing firm, and the confrontational activist then campaigns against a profit-maximizing firm. If the threat is sufficiently strong that the firms would accept the demand of the confrontational activist, the cooperative activist is indifferent to which firm it chooses. Consequently, when campaigns are observed, profit-maximizing firms are matched with confrontational activists, and socially responsible firms are matched with cooperative activists. The threat of confrontation creates a positive externality for the cooperative activist, which has an incentive to contribute to the campaign of the confrontational activist.

DOI:10.1561/100.00011065