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

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