Paging Inspector Sands: The Costs of Public Information

Sacha Kapoor () and Arvind Magesan

American Economic Journal: Economic Policy, 2014, vol. 6, issue 1, 92-113

Abstract: We exploit the introduction of pedestrian countdown signals—timers that indicate when traffic lights will change—to evaluate a policy that improves the information of all market participants. We find that although countdown signals reduce the number of pedestrians struck by automobiles, they increase the number of collisions between automobiles. They also cause more collisions overall, implying that welfare gains can be attained by hiding the information from drivers. Whereas most empirical studies on the role of information in markets suggest that asymmetric information reduces welfare, we conclude that asymmetric information can, in fact, improve it.

JEL-codes: D82 D83 R41 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/pol.6.1.92
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