Should We Let Interest Groups Learn from Their Competitors?

Abstract: I study a formal model where competing interest groups privately acquire and disclose verifiable information to a principal over time. The focus is on how observing lobbying behavior of competitors---transparency---affects aggregate information provision. I find that transparency may be disadvantageous because groups are dissuaded from acquiring information if they learn that competitors have disclosed favorable information for their cause. Conversely, transparency allows interest groups to be selective in acquiring information and may lead to more informed decision-making. Further, transparency causes changes in the timing of disclosure because interest groups face a trade off between scaring competitors with early disclosure and waiting to learn whether further information acquisition is necessary. The results contribute to debates over lobbying transparency in organizations such as the European Commission.