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Lobbying, Information Transmission, and Unequal Representation

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Author Info
Johan Lagerlof (WZB & CEPR)
Lars Frisell (Sveriges Riksbank)

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Abstract

We study the effects of unequal representation in the interest-group system on the degree of information transmission between a lobbyist and a policymaker. Employing a dynamic cheap-talk model in which the lobbyist cares instrumentally about his reputation for truthtelling, we show that the larger is the inequality, the less information can credibly be transmitted to the policymaker. We also investigate the effects of inequality on welfare and discuss the welfare effects of institutions that increase transparency but which as well, as an unintended side-effect, lower the lobbyist's incentives for truthtelling.

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File URL: http://129.3.20.41/eps/pe/papers/0402/0402003.pdf
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Publisher Info
Paper provided by EconWPA in its series Public Economics with number 0402003.

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Length: 26 pages
Date of creation: 09 Feb 2004
Date of revision:
Handle: RePEc:wpa:wuwppe:0402003

Note: Type of Document - pdf; pages: 26; figures: included. The most updated version of the paper can be downloaded at www.JohanLagerlof.org
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Web page: http://129.3.20.41

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Related research
Keywords: lobbying; interest groups; reputation; information transmission; representation; inequality; bias;

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Find related papers by JEL classification:
D6 - Microeconomics - - Welfare Economics
D7 - Microeconomics - - Analysis of Collective Decision-Making
H - Public Economics

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Milgrom, Paul & Roberts, John, 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," Econometrica, Econometric Society, vol. 50(2), pages 443-59, March. [Downloadable!] (restricted)
  2. Lagerlof, Johan, 1997. "Lobbying, information, and private and social welfare," European Journal of Political Economy, Elsevier, vol. 13(3), pages 615-637, September. [Downloadable!] (restricted)
  3. Stephen Morris, 2001. "Political Correctness," Journal of Political Economy, University of Chicago Press, vol. 109(2), pages 231-265, April. [Downloadable!] (restricted)
    Other versions:
  4. Sobel, Joel, 1985. "A Theory of Credibility," Review of Economic Studies, Blackwell Publishing, vol. 52(4), pages 557-73, October. [Downloadable!] (restricted)
  5. Paul R. Milgrom & John Roberts, 1985. "Relying on the Information of Interested Parties," Cowles Foundation Discussion Papers 749, Cowles Foundation, Yale University. [Downloadable!]
    Other versions:
  6. Morten Bennedsen & Sven E. Feldmann, 2002. "Lobbying Legislatures," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 919-948, August. [Downloadable!] (restricted)
  7. Potters, Jan & van Winden, Frans, 1992. " Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-92, October.
  8. Vijay Krishna & John Morgan, 2001. "A Model Of Expertise," The Quarterly Journal of Economics, MIT Press, vol. 116(2), pages 747-775, May. [Downloadable!] (restricted)
    Other versions:
  9. Benabou, Roland & Laroque, Guy, 1992. "Using Privileged Information to Manipulate Markets: Insiders, Gurus, and Credibility," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 921-58, August. [Downloadable!] (restricted)
    Other versions:
  10. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-51, November. [Downloadable!] (restricted)
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