Interest Group Size Dynamics and Policymaking

We present a dynamic model of endogenous interest group sizes and policymaking. The model integrates ‘top-down’ (policy) and ‘bottom-up’ (individual and social-structural) influences on the development of interest groups. Comparative statics results show that the standard assumption of fixed-sized interest groups can be misleading. Furthermore, dynamic analysis of the model demonstrates that reliance on equilibrium results can also be misleading since equilibria may be unstable. Complicated dynamics may then emerge naturally, ∗University of Arizona, 401 McClelland Hall P.O. Box 210108, Tucson, Arizona 85721-0108 USA. E-mail: [email protected]. †CeNDEF and Department of Quantitative Economics, University of Amsterdam, Roetersstraat 11, 1018 WB Amsterdam, the Netherlands, E-mail: [email protected]. Financial support under a NWO-Pionier grant is gratefully acknowledged. ‡CREED and Department of Economics, University of Amsterdam, Roetersstraat 11, 1018 WB, Amsterdam, the Netherlands, E-mail: [email protected].