Lobbying under conflicting interests

A variation of a cheap talk game is considered in which the preferences of a special interest group conflict with those of a policymaker if she is benevolent; however, she may be corrupt. The interest group, which knows the state of the world, sends a message to the policymaker and may also exert costly lobbying effort for its preferred policy to be adopted. We show that expected welfare, which is the same in all PBE, is decreasing in the probability that the policymaker is corrupt. Surprisingly, it decreases faster when this probability is above one-half, suggesting that corrupt behavior will be tolerated only up to a certain level.