Political Economy Commons^™

Evolving Influence: Resolving Extreme Conflicts Of Interest In Advisory Relationships, Raphael Boleslavsky, Tracy Lewis

Raphael Boleslavsky

An advocate for a special interest provides advice to an uninformed planner for her to consider in making a sequence of decisions. Although the advocate may have valuable information for the planner, it is also known that the advocate is interested only in advancing his cause and will distort his advice in order to influence the planner's decision. Each time she repeats the problem, however, the planner learns about the accuracy of the advocate's recommendation, mitigating some of the advocate's incentive to act in a self-serving manner. We propose a theory to explain why planners do sometimes rely on information …