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The Polarization Effect of Monopsonistic Lobbying

Theoretical Economics 2025-12-02 v1

Abstract

Classical spatial models predict platform convergence, yet empirical polarization persists. This paper proposes a non-electoral mechanism: lobbying as a monopsonistic market for legislative support. Here, extreme benefactors must pay more to attract distant politicians, creating a rent gradient that rewards platform differentiation. We find that the unique equilibrium places politicians at (14,34)(\frac{1}{4},\frac{3}{4}) for any monotone policy-production cost. Thus, polarization can arise solely from lobbying-market structure, independent of electoral incentives.

Keywords

Cite

@article{arxiv.2512.01796,
  title  = {The Polarization Effect of Monopsonistic Lobbying},
  author = {Peter Shum},
  journal= {arXiv preprint arXiv:2512.01796},
  year   = {2025}
}

Comments

Draft, 10 pages including appendix and references, 1 figure