Indirect Lobbying and Media Bias

This paper provides a model of indirect lobbying where special interest groups try to influence policy outcomes by targeting voters. Specifically, competing lobbies engage in influence activities to affect the information that a (possibly biased) media outlet collects on the public value of approving/rejecting a policy proposal. The media outlet acts as a filter between lobbies and voters. It has to decide what to communicate to voters based on the information it collects and its own idiosyncratic bias. The results show that the higher the idiosyncratic bias of the media outlet, the lower the lobbies’ incentives to spend resources on influence activities. Conversely, the lower the cost of engaging in influence activities for lobbies, the higher the probability of news-slanting by the media outlet. Moreover, the more voters care about receiving accurate information, the higher the expected distortion in the policy outcome. From a public policy perspective, increasing the cost of lobbies’ influence activities would decrease the distortion in the policy outcome and increase voters’ welfare. Finally, asymmetries between lobbies lead to different probabilities of news-slanting by different media outlet types.