, Volume 37, Issue 3, pp 397-424
Date: 18 Sep 2010

A signal-jamming model of persuasion: interest group funded policy research

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Abstract

This article analyzes a simple model of policy making under uncertainty in the presence of an interest group that may fund and lobby research. In the model, if research is not disclosed via lobbying it enters the public domain and, subsequently, is randomly observed by the policy maker (PM). Consequently, the interest group strategically chooses both whether to fund research and whether to lobby it versus let it be randomly observed. The main result is that for a range of parameter values, in equilibrium the interest group sometimes funds, but never lobbies, research. This behavior effectively “jams” the public signal of the PM, making the policy choice worse on average. This occurs despite all research being unbiased. The results provide qualified theoretical support for the value of research funding transparency and implications for the interpretation of interest group funded research.

The title of this article pays homage to Fudenberg and Tirole (1986).