Absolute groupishness and the demand for information

Johannes Lohse and Rebecca McDonald

VfS Annual Conference 2021 (Virtual Conference): Climate Economics from Verein für Socialpolitik / German Economic Association

Abstract: Does social identity affect how decision makers consume and digest new information? We study this question through a theoretically informed experiment, employing a variant of the sender receiver game in which receivers can purchase reports from up to two senders. Depending on senders' preferences for truth-telling, reports are either informative or not. In the baseline condition of our experiment, receivers observe senders' incentives for reporting truthfully. In the treatment condition receivers additionally observe whether they share a group identity with the sender. Group identities are induced via a standard minimal group paradigm. We find that senders behave in line with a model that assumes senders incur a positive lying cost. Making social identity observable significantly affects information acquisition and makes receivers more prone to ignore potentially informative outgroup reports. This is especially the case when outgroup senders have higher incentives for truthtelling. This change in information acquisition has implications for optimal decision making: it negatively affects receivers' ability to correctly infer the true state of world.

Keywords: Misinformation; Social Identity; Sender-Receiver Game; Fake News; Information (search for similar items in EconPapers)
JEL-codes: C91 D83 D91 L82 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-exp
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc21:242454

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