A Guide to Extracting Information from Environmental Pressure Groups

This paper examines the relationship between environmental pressure groupsand environmental policy makers. Environmental pressure groups are assumedto possess valuable private information on environmental issues.Environmental pressure groups are also assumed to pursue their ownpreferences, which are only partially correlated with policy makers'preferences. A new aspect is that binding contracts with side payments arenot allowed, which accurately describes the interaction betweenenvironmental pressure groups and governments. It is shown that by choosingprobabilities of acting on environmental pressure groups' signals, adecision maker can force environmental pressure groups to reveal superiorinformation even in the absence of binding contracts.