Essays in information economics

These essays examine how economic agents strategically choose to produce, manipulate, or disclose information, when that information can influence the behaviour of others. By theoretically modelling these choices, it seeks to contribute to debates about the optimal design of policies such as transparency rules, the regulation of lobbying, or the concentration of ownership among information providers such as media groups. The models developed in these essays also provide a framework to interpret and evaluate empirical assessments of how information influences behaviour. The first chapter looks at how interest groups choose to generate information to influence policies. It innovates on the literature by explicitly modelling the choice of policy makers to obtain their own confidential internal information ahead of interactions with these groups. This approach reveals unintended consequences of transparency policies and the subtle role that institutions such as congressional research agencies can have on the quality of policy making. The second chapter studies how agents choose to produce new information, for instance by running experiments, in the presence of competing information providers. In particular, it examines whether these agents produce more information when they compete than when they collude. The existing literature has established that when these agents possess no existing information, competition always increases the amount of new information produced. I show that when agents do possess prior information, this conclusion does not necessarily hold. The third chapter analyses how policy choices are affected when voters have a limited capacity to correctly interpret information about policy performance. In a situation where policy performance provides information about the competence of policy makers, and where voters decide whether to re-elect incumbents based on that information, voters may benefit from these cognitive limitations as they can induce policy makers to choose better policies