Peddling Influence through Well Informed Intermediaries,” mimeo

This paper studies how a sender with private information can influence the decisionmaker through well-informed intermediaries such as experts, critics or physicians. Both the sender and the inter-mediary may be independently objective or biased: the objective type passes on the most accurate information while the biased type wants to push a particular agenda but also to appear objective. Although using one’s own information is a sign of objectivity, the biased intermediary selectively in-corporates the sender’s information to push his agenda. When both the sender and the intermediary are sufficiently concerned about reputation, their truth-telling incentives are strategic substitutes. In this case, policy measures encouraging independent reporting may be more effective than those aiming at improving the intermediary’s truth telling, but the sender prefers using the intermediary to reporting independently. Moreover, measures raising the sender’s reputation cost may worsen the intermediary’s lying and make the decisionmaker strictly worse off