Merchants of doubt: Corporate political action when NGO credibility is uncertain

Abstract

The literature on special interest groups emphasizes two main influence channels: campaign contributions and informational lobbying. We introduce a third channel: providing information about the credibility of political rivals. In particular, nongovernmental organizations (NGOs) often aim to communicate scientific knowledge to policymakers, but industry-backed groups often attempt to undermine their credibility. We extend a standard signaling model of interest-group lobbying to include fixed costs of policymaker action and show that these costs make possible two mechanisms for creating doubt about the value of policy action. The first uses Bayesian persuasion to suggest the NGO may be a noncredible radical. The second involves creating an opposition think tank (TT) that acts as a possible radical, not a credible moderate. We show that the TT cannot always implement the Bayesian persuasion benchmark, and we characterize how optimal TT design varies with exogenous parameters.

Understanding the Organization of Green Activism: Sociological and Economic Perspectives

“…In an interesting recent contribution—inspired by the case study evidence presented by Oreskes and Conway (2010) in their well-known book Merchants of Doubt— Chiroleu-Assouline and Lyon (2016) formalize the way in which an industry-backed group can undermine the credibility of NGO advice. The first tactic does not require supplying competing and credible scientific evidence itself, but rather by “smearing” the reputation of the NGO.…”

“…The second tactic is to create think tanks that offer their own, strategically biased, versions of science. 13 When facing a sophisticated (Bayesian) audience, Chiroleu-Assouline and Lyon (2016) explore the circumstances in which each tactic can be effectively employed.…”

Order of Commitments in Bayesian Persuasion with Partial-informed Senders

“…However, whether the (potential) exploit of 𝑌 's signal can hurt 𝑌 depends on the correlation of 𝑌 and 𝑍 's private information and the relevant payoff matrices. Not only is our example plausible, similar scenarios with multiple partial-informed senders can be found in data markets [1,10], corporate political actions [8], and stress testing [14]. Hence, our goal is to characterize broadly applicable conditions that determine when the commitment order matters.…”

Principles versus principal: Reconciling norm compliance and shareholder value

“…Third, in contexts where it is not obvious who will monitor the agent continuously and who will make contingent appraisals (as in the management of innovation application that was sketched above), having guidelines to select the right principal to do the right thing would be helpful. Fourth, as we pointed out in discussing the corporate social responsibility application, extra attention should be devoted to the nature of incentives provided by the external stakeholder (on this issue, see Crifo & Guidoux, ); an important question this might raise is whether the assessment made by one principal would be challenged by the other party (about this, see Chiroleu‐Assouline & Lyon, ; Strîmbu & Gonzalez, ). Finally, the above arrangement should lend itself to experiments and numerical simulations, to check its robustness and gain further insights on its possible implementation.…”