Information, Access, and Contributions: A Signaling Model of Lobbying.

Interest groups pay monetary contributions to gain access and provide information to a policymaker. If their interests are aligned with those of the policymaker's constituency, they have costless access and report their private information truthfully. If their interests conflict, they are forced to pay a strictly positive contribution in order to enhance the credibility of their reports. The policymaker bases her policy decision on the competing reports and the size of the contributions accompanying these reports. The interest groups' contribution decisions are plagued by a free rider problem. I derive the implications of this problem for the size and pattern of contributions and for the degree of information aggregation. Copyright 1995 by Kluwer Academic Publishers