A guide to extracting information from environmental pressure groups

This paper examines the relationship between environmental pressure groups and environmental policy makers. Environmental pressure groups are assumed to possess valuable private information on environmental issues. Environmen tal pressure groups are also assumed to pursue their own preferences, which are only partially correlated with policy makers' preferences. A new aspec t is that binding contracts with side payments are not allowed, which accur ately describes the interaction between environmental pressure groups and g overnments. It is shown that by choosing probabilities of acting on environ mental pressure groups' signals, a decision maker can force environmental p ressure groups to reveal superior information even in the absence of bindin g contracts.