Ignorance as a Commitment Device

Dan Sasaki
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Dan Sasaki: Institute of Economics, University of Copenhagen

No 97-08, Discussion Papers from University of Copenhagen. Department of Economics

Abstract: In a strategic environment, when a player's information acquisition is observable to others, it may strictly decrease the player's resulting equilibrium payoff even if information acquisition itself is costless. This phenomenon has previously been known by a number of examples. This paper shows that such a phenomenon can indeed arise under a broad class of conditions, not being confined to carefully selected specific examples. Excess information is almost always hurtful. This finding implies that public provision of information can strictly hurt the set of economic agents to be informed. To protect the interest of a certain economic group, it is almost always desirable to impose appropriate limitations on the official disclosure of information to the group.

Keywords: information acquisition; value of information; state space; disclosure (search for similar items in EconPapers)
JEL-codes: C72 D8 (search for similar items in EconPapers)
Pages: 26 pages
Date: 1997-06
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Persistent link: https://EconPapers.repec.org/RePEc:kud:kuiedp:9708

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