The Common Agency game: theory and applications to political economy

Abstract

In the political economy literature, the common agency game involves various and conflicting interest groups, seeking to influence the decisions of an incumbent government in favour of their members’ welfare. Beginning with some of its theoretical aspects, in this comprehensive survey we provide an overview of the applications of the common agency model to issues of political influence. We distinguish four areas of application; international markets, environmental policies, domestic economic policies and the political system. In addition, we describe a number of weaknesses of the common agency framework and the ways the basic model was extended for the purpose of addressing them. Finally, the dynamic version of the basic framework followed by some applications are presented, as well as some ideas for future research.