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Producing and Manipulating Information

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  • Robert Dur
  • Otto H. Swank

Abstract

This paper studies the selection of information collecting agents by policy makers in the light of two agency problems. First, it is often hard to ascertain how much effort agents have put in acquiring information. Second, when agents have an interest in the policy outcome, they may manipulate information. We show that unbiased advisers put highest effort in collecting information. Eliminating manipulation of information, however, requires that the preferences of the policy maker and the adviser be aligned. Therefore, policy makers appoint advisers with preferences that are less extreme than their own. Copyright 2005 Royal Economic Society.

Suggested Citation

  • Robert Dur & Otto H. Swank, 2005. "Producing and Manipulating Information," Economic Journal, Royal Economic Society, vol. 115(500), pages 185-199, January.
  • Handle: RePEc:ecj:econjl:v:115:y:2005:i:500:p:185-199
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    References listed on IDEAS

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    1. repec:cup:apsrev:v:87:y:1993:i:02:p:319-333_09 is not listed on IDEAS
    2. Aghion, Philippe & Tirole, Jean, 1997. "Formal and Real Authority in Organizations," Journal of Political Economy, University of Chicago Press, vol. 105(1), pages 1-29, February.
    3. Gilligan, Thomas W & Krehbiel, Keith, 1997. "Specialization Decisions within Committee," Journal of Law, Economics, and Organization, Oxford University Press, vol. 13(2), pages 366-386, October.
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    6. Paul Milgrom & John Roberts, 1986. "Relying on the Information of Interested Parties," RAND Journal of Economics, The RAND Corporation, vol. 17(1), pages 18-32, Spring.
    7. Vijay Krishna & John Morgan, 2001. "A Model of Expertise," The Quarterly Journal of Economics, Oxford University Press, vol. 116(2), pages 747-775.
    8. Gilligan, Thomas W & Krehbiel, Keith, 1987. "Collective Decisionmaking and Standing Committees: An Informational Rationale for Restrictive Amendment Procedures," Journal of Law, Economics, and Organization, Oxford University Press, vol. 3(2), pages 287-335, Fall.
    9. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    10. Potters, Jan & van Winden, Frans, 1992. "Lobbying and Asymmetric Information," Public Choice, Springer, vol. 74(3), pages 269-292, October.
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    Cited by:

    1. Wrasai, Phongthorn & Swank, Otto H., 2007. "Policy makers, advisers, and reputation," Journal of Economic Behavior & Organization, Elsevier, vol. 62(4), pages 579-590, April.
    2. John M. de Figueiredo & Charles M. Cameron, 2006. "Endogenous Cost Lobbying: Theory and Evidence," Hi-Stat Discussion Paper Series d05-156, Institute of Economic Research, Hitotsubashi University.
    3. Irene Valsecchi, 2013. "The expert problem: a survey," Economics of Governance, Springer, vol. 14(4), pages 303-331, November.
    4. Silvia Dominguez-Martinez & Otto Swank, 2006. "Polarization, Information Collection and Electoral Control," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 26(3), pages 527-545, June.
    5. Sylvain Bourjade & Bruno Jullien, 2011. "The roles of reputation and transparency on the behavior of biased experts," RAND Journal of Economics, RAND Corporation, vol. 42(3), pages 575-594, September.
    6. Yves Oytana, 2014. "The Judicial Expert in a Two-Tier Hierarchy," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 170(3), pages 537-570, September.
    7. Gromb, Denis & Martimort, David, 2007. "Collusion and the organization of delegated expertise," Journal of Economic Theory, Elsevier, vol. 137(1), pages 271-299, November.
    8. Zara Sharif & Otto H. Swank, 2012. "Do More Powerful Interest Groups have a Disproportionate Influence on Policy?," Tinbergen Institute Discussion Papers 12-134/VII, Tinbergen Institute.
    9. Kim, Chulyoung, 2015. "Centralized vs. Decentralized Institutions for Expert Testimony," MPRA Paper 69618, University Library of Munich, Germany.
    10. Shun-ichiro Bessho & Kimiko Terai, 2013. "Fiscal restraints by advisors," Economics of Governance, Springer, vol. 14(3), pages 205-232, August.
    11. Leppälä, Samuli, 2013. "Arrow's paradox and markets for nonproprietary information," Cardiff Economics Working Papers E2013/2, Cardiff University, Cardiff Business School, Economics Section.
    12. Martin Gregor, 2014. "Receiver's access fee for a single sender," Working Papers IES 2014/17, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2014.
    13. Eric Van den Steen, 2010. "On the origin of shared beliefs (and corporate culture)," RAND Journal of Economics, RAND Corporation, vol. 41(4), pages 617-648.
    14. Herresthal, C., 2017. "Hidden Testing and Selective Disclosure of Evidence," Cambridge Working Papers in Economics 1712, Faculty of Economics, University of Cambridge.
    15. Gregor Martin, 2015. "To Invite or Not to Invite a Lobby, That Is the Question," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 143-166, July.
    16. repec:eee:jeborg:v:137:y:2017:i:c:p:54-71 is not listed on IDEAS
    17. Di Maggio, Marco, 2009. "Accountability and Cheap Talk," MPRA Paper 18652, University Library of Munich, Germany.
    18. Flavia Roldán, 2013. "The organization of expertise in the presence of communication," Review of Economic Design, Springer;Society for Economic Design, vol. 17(1), pages 63-81, March.
    19. Mishra, Ajit & Sarangi, Sudipta, 2016. "High-powered incentives and communication failure," Journal of Economic Behavior & Organization, Elsevier, vol. 131(PA), pages 51-60.
    20. Chulyoung Kim, 2014. "Adversarial and Inquisitorial Procedures with Information Acquisition," Journal of Law, Economics, and Organization, Oxford University Press, vol. 30(4), pages 767-803.
    21. Ebrahimnejad, Ali & Tavana, Madjid & Santos-Arteaga, Francisco J., 2016. "An integrated data envelopment analysis and simulation method for group consensus ranking," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 119(C), pages 1-17.
    22. Elisabeth Schulte, 2012. "Communication in committees: who should listen?," Public Choice, Springer, vol. 150(1), pages 97-117, January.
    23. Hidir, Sinem, 2017. "Information Acquisition and Credibility in Cheap Talk," CRETA Online Discussion Paper Series 36, Centre for Research in Economic Theory and its Applications CRETA.

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