Optional disclosure and observational learning

Diefeng Peng, Yulei Rao, Xianming Sun and Erte Xiao

Journal of Economic Behavior & Organization, 2025, vol. 229, issue C

Abstract: We examine how allowing individuals to self-determine whether to disclose their behavior to others can mitigate the disruptive effect of information cascades on the efficiency of observational learning. We theoretically analyze various disclosure strategies and show that observational learning can be more efficient under the optional disclosure condition if decision-makers adopt a selective disclosure strategy. However, data from a controlled laboratory experiment suggest that spontaneous disclosure decisions are not sufficiently selective. As a result, optional disclosure fails to increase learning efficiency. We further demonstrate that providing public information about the effects of disclosure behavior on others significantly improves learning outcomes.

Keywords: Observational learning; Information cascade; Optional disclosure (search for similar items in EconPapers)
JEL-codes: C91 D82 D83 D91 (search for similar items in EconPapers)
Date: 2025
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Working Paper: Optional Disclosure and Observational Learning (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:229:y:2025:i:c:s0167268124004311

DOI: 10.1016/j.jebo.2024.106817

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