Adaptive Skepticism in the Face of Uncertainty: An Experimental Study on Verifiable Information Disclosure

Christian Koch, Stefan Penczynski and Sihong Zhang
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Christian Koch: Department of Economics, University of Vienna
Stefan Penczynski: School of Economics and Centre for Behavioural and Experimental Social Science, University of East Anglia
Sihong Zhang: McKinsey & Company, Inc.

No 25-02, Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) from School of Economics, University of East Anglia, Norwich, UK.

Abstract: When sellers disclose verifiable information, buyers must exercise sufficient skepticism to account for potentially selective disclosure, yet previous evidence suggests they often fail to do so. We experimentally examine how buyers adapt their skepticism in response to uncertainty about the pool of available verifiable information. Contrary to previous findings on institutional manipulations in the literature, we discover that buyers adapt to our institutional change quite effectively, even—if anything—enhancing their skepticism. These results suggest that buyers’ skepticism may adjust appropriately, or not, depending on the specific context, implying that consumer naivety may be less frequent, at least when real-world features prompt scrutiny.

Keywords: Disclosure; verifiable information; competition; Peltzman effect (search for similar items in EconPapers)
JEL-codes: D40 D83 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-exp and nep-mac
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