TY - JOUR
T1 - Does free information provision crowd out costly information acquisition? It's a matter of timing
AU - Aycinena, Diego
AU - Elbittar, Alexander
AU - Gomberg, Andrei
AU - Rentschler, Lucas
N1 - Funding Information:
For helpful comments, we gratefully acknowledge Sourav Bhattacharya, Eduardo Ferraz, César Mantilla, Santiago Sautua as well as participants at the 2018 North American Economics Science Association Conference in Antigua, the 2018 Meetings of the Society for Social Choice and Welfare, the 2018 Utah Experimental Economics Conference, the 2019 Bogotá Experimental Economics Conference, and seminars at George Mason University, Florida International University, and CIDE. Simón Caicedo provided wonderful research assistance, and Mario Sandari Gomez and Megan Luetje provided invaluable research support with experimental sessions. Gomberg would like to acknowledge the financial support of Asociación Mexicana de Cultura. Aycinena would like to acknowledge generous financial support from the Economic Science Institute at Chapman University. Elbittar would like to acknowledge generous financial support from CIDE. For the experimental sessions conducted in Guatemala (wave 1), Acuerdo Ministerial SP-M-466-2007 (regulating human clinical trials in Guatemala) did not apply to our study and, at the time, no IRB existed at any of the authors' institutions. Nevertheless, we obtained informed written consent from all participants and adhered to standard experimental protocols (No deception was used, and we ensured privacy and security of the data). The experimental sessions conducted at the Economic Science Institute (wave 2) were covered under IRB approval #0910H017. An early working paper version circulated under the title of “Rational inattention and timing of information provision.”
Funding Information:
For helpful comments, we gratefully acknowledge Sourav Bhattacharya, Eduardo Ferraz, César Mantilla, Santiago Sautua as well as participants at the 2018 North American Economics Science Association Conference in Antigua, the 2018 Meetings of the Society for Social Choice and Welfare, the 2018 Utah Experimental Economics Conference, the 2019 Bogotá Experimental Economics Conference, and seminars at George Mason University, Florida International University, and CIDE. Simón Caicedo provided wonderful research assistance, and Mario Sandari Gomez and Megan Luetje provided invaluable research support with experimental sessions. Gomberg would like to acknowledge the financial support of Asociación Mexicana de Cultura. Aycinena would like to acknowledge generous financial support from the Economic Science Institute at Chapman University . Elbittar would like to acknowledge generous financial support from CIDE . For the experimental sessions conducted in Guatemala (wave 1), Acuerdo Ministerial SP-M-466-2007 (regulating human clinical trials in Guatemala) did not apply to our study and, at the time, no IRB existed at any of the authors' institutions. Nevertheless, we obtained informed written consent from all participants and adhered to standard experimental protocols (No deception was used, and we ensured privacy and security of the data). The experimental sessions conducted at the Economic Science Institute (wave 2) were covered under IRB approval # 0910H017 . An early working paper version circulated under the title of “Rational inattention and timing of information provision.”
Publisher Copyright:
© 2023 Elsevier Inc.
PY - 2023/9
Y1 - 2023/9
N2 - Conventional wisdom suggests that promising free information to an agent would crowd out costly information acquisition. We theoretically demonstrate that this intuition only holds as a knife-edge case in which priors are symmetric. Indeed, when priors are asymmetric, a promise of free information in the future induces agents to increase information acquisition. In the lab, we test whether such crowding out occurs for both symmetric and asymmetric priors. Our results are qualitatively in line with the predictions: When priors are asymmetric, the promise of future free information induces subjects to acquire more costly information.
AB - Conventional wisdom suggests that promising free information to an agent would crowd out costly information acquisition. We theoretically demonstrate that this intuition only holds as a knife-edge case in which priors are symmetric. Indeed, when priors are asymmetric, a promise of free information in the future induces agents to increase information acquisition. In the lab, we test whether such crowding out occurs for both symmetric and asymmetric priors. Our results are qualitatively in line with the predictions: When priors are asymmetric, the promise of future free information induces subjects to acquire more costly information.
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U2 - 10.1016/j.geb.2023.05.006
DO - 10.1016/j.geb.2023.05.006
M3 - Article
AN - SCOPUS:85163150133
SN - 0899-8256
VL - 141
SP - 182
EP - 195
JO - Games and Economic Behavior
JF - Games and Economic Behavior
ER -