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Lobbying, Information Transmission and Unequal Representation

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  • Lagerlof, Johan
  • Frisell, Lars

Abstract

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

Suggested Citation

  • Lagerlof, Johan & Frisell, Lars, 2004. "Lobbying, Information Transmission and Unequal Representation," CEPR Discussion Papers 4313, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:4313
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    References listed on IDEAS

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    1. Milgrom, Paul & Roberts, John, 1982. "Limit Pricing and Entry under Incomplete Information: An Equilibrium Analysis," Econometrica, Econometric Society, vol. 50(2), pages 443-459, March.
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    5. 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.
    6. Morten Bennedsen & Sven E. Feldmann, 2002. "Lobbying Legislatures," Journal of Political Economy, University of Chicago Press, vol. 110(4), pages 919-948, August.
    7. Austen-Smith, David, 1995. "Campaign Contributions and Access," American Political Science Review, Cambridge University Press, vol. 89(3), pages 566-581, September.
    8. Joel Sobel, 1985. "A Theory of Credibility," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 52(4), pages 557-573.
    9. Crawford, Vincent P & Sobel, Joel, 1982. "Strategic Information Transmission," Econometrica, Econometric Society, vol. 50(6), pages 1431-1451, November.
    10. Lagerlof, Johan, 1997. "Lobbying, information, and private and social welfare," European Journal of Political Economy, Elsevier, vol. 13(3), pages 615-637, September.
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    Cited by:

    1. Murphy Gary, 2017. "Lobbying regulation in Ireland: Fool’s errand or finest hour?," Administration, Sciendo, vol. 65(2), pages 127-144, May.

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    More about this item

    Keywords

    Lobbying; Interest groups; Reputation; Information transmission; Representation; Inequality; Bias;
    All these keywords.

    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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