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A welfare analysis of strategic information revelation

Author

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  • Lagerlöf, Johan

    (Department of Economics)

Abstract

In this paper a persuasion game is analyzed, where "persuasion" is understood as an interested party's acquisition and transmission of information to a decision maker. The model allows for many interpretations, e.g., political lobbying or influence activities in organizations. Individuals' ex ante welfare levels in the equilibria of this model are compared to those in a benchmark model where information acquisition (and hence persuasion) is not possible. It is found that the decision maker is always better off with his choice whether to acquire information is unobservable. Moreover, we study the welfare effects for a third party with preferences aligned to those of the decision maker. This third party has himself not the opportunity to persuade.

Suggested Citation

  • Lagerlöf, Johan, 1996. "A welfare analysis of strategic information revelation," SSE/EFI Working Paper Series in Economics and Finance 109, Stockholm School of Economics.
    • Handle: RePEc:hhs:hastef:0109
    as

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    More about this item

    Keywords

    Information transmission; persuasion; interest groups; lobbying competition; federalism;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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