(Pro-) Social Learning and Strategic Disclosure

Roland Benabou and Nikhil Vellodi

No 32483, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study a sequential experimentation model with endogenous feedback. Agents choose between a safe and risky action, the latter generating stochastic rewards. When making this choice, each agent is selfishly motivated (myopic). However, agents can disclose their experiences to a public record, and when doing so are pro-socially motivated (forward-looking). When prior uncertainty is large, disclosure is both polarized (only extreme signals are disclosed) and positively biased (no feedback is bad news). When prior uncertainty is small, a novel form of unraveling occurs and disclosure is complete. Subsidizing disclosure costs can perversely lead to less disclosure but more experimentation.

JEL-codes: D82 D83 D91 (search for similar items in EconPapers)
Date: 2024-05
New Economics Papers: this item is included in nep-exp, nep-gth and nep-mic
Note: IO PE
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