Citizens (or stakeholders groups) signal their policy demand or preferences through various channels such as lobbying or voting choices. The higher the costs involved in signalling this demand the lower the level of effective demand. Likewise the government’s willingness to supply the policy favour will increase with increasing political benefits that would accrue to the government. Equilibrium is found at the point where the demand for a concession matches the willingness to supply it given the respective perceptions of costs and benefits.