SSE/EFI Working Paper Series in Economics and Finance
A welfare analysis of strategic information revelation
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.
Keywords: Information transmission; persuasion; interest groups; lobbying competition; federalism; (follow links to similar papers)
JEL-Codes: D72; D82; (follow links to similar papers)
37 pages, March 1996
- This paper is forthcoming as:
Lagerlöf, Johan, 'Lobbying, Information, and Private and Social Welfare', European Journal of Political Economy.
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