'Where Ignorance is Bliss, 'Tis Folly to Be Wise': Transparency in Contests

45 Pages Posted: 12 May 2011 Last revised: 10 Jan 2015

See all articles by Philipp Denter

Philipp Denter

Universidad Carlos III de Madrid

John Morgan

University of California, Berkeley - Economic Analysis & Policy Group

Dana Sisak

Erasmus University Rotterdam (EUR) - Department of Economics; Tinbergen Institute

Date Written: June 20, 2014

Abstract

Disclosure of lobbying activity has become much more timely and stringent in the US, and many demand similar regulation also for lobbying in the European Union. Disclosure informs voters about a lobbyist’s activity, but it also informs rival lobbying groups, with strategic consequences. Under mild conditions, we show that mandatory real-time disclosure exacerbates wasteful lobbying and worsens the allocative efficiency of resulting policies. Our model highlights that the timing of disclosure is an important policy choice, even apart from the amount of disclosure. Delayed disclosure raises welfare compared to instantaneous disclosure.

Keywords: Transparency Policy, Rent-seeking Contests, Information Disclosure, Value of Ignorance

JEL Classification: D72, D82, L12

Suggested Citation

Denter, Philipp and Morgan, John and Sisak, Dana, 'Where Ignorance is Bliss, 'Tis Folly to Be Wise': Transparency in Contests (June 20, 2014). Available at SSRN: https://ssrn.com/abstract=1836905 or http://dx.doi.org/10.2139/ssrn.1836905

Philipp Denter

Universidad Carlos III de Madrid ( email )

CL. de Madrid 126
Madrid, Madrid 28903
Spain

John Morgan

University of California, Berkeley - Economic Analysis & Policy Group ( email )

Berkeley, CA 94720
United States
510-642-2669 (Phone)
810-885-5959 (Fax)

HOME PAGE: http://faculty.haas.berkeley.edu/rjmorgan/

Dana Sisak (Contact Author)

Erasmus University Rotterdam (EUR) - Department of Economics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

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