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Chapter 18: Q18 (page 441)

Representatives of competing firms often comprise special interest groups. Why are competitors sometimes willing to cooperate in order to form lobbying associations?

Short Answer

Expert verified

Competing firms' representatives form special interest groups for : better influential bargaining & negotiating power, privileges.

Step by step solution

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01

Basic Definitions

Special Interest groups are small groups, that are well organised & power equipped regarding a specifically focused issue.

They engage in Lobbying. Lobbying is the effort to legally influence legislators, government officials, regulatory members - for own or organisational interest.

02

Detailed Explanation

Competitors willingly cooperate to form lobbying associations as :

Huge lobbying groups are in better position to exert more pressure ; and they have more bargaining, negotiation power.

This united influential power & privilege is much higher than individual power & privileges.

These issues also gain more public popularity & prominence as compared to those of individual firms' interest.

  • For eg : An individual labor or firms' interest would have more probability of being ignored, that interests of whole labor union or trade union.

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