We study lobby group formation in a two-stage model where the players rst form lobbygroups that then engage in a rent-seeking contest to inuence the legislator. However, theoutcome of the contest aects all players according to the ideological distance between theimplemented policy and the players' preferences. The players can either lobby by themselves,form a coalition of lobbyists or free ride. We nd that free coalition formation is reasonableif either players with moderate preferences face lobby groups with extreme preferences, or ifthere are two opposing coalitions with an equal number of members. Otherwise, there arealways free riders among the players.
