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Too much information? An experiment on communication and cooperation

Daniel Jones ()

Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), 2017, vol. 66, issue C, 29-39

Abstract: There are many situations where an informed third-party agent communicates information about the value of a public good or group project to contributors. One example is the information provided by charity ratings organizations. I ask how information about the quality of a public good should be communicated in order to minimize free-riding. I propose that coarse or pooled messages about the quality of the public good can increase contributions and, in turn, social welfare. If individuals cannot distinguish between a public good that they would like to contribute to and a public good that would otherwise suffer from a high degree of free-riding, contributions to the latter may approach the efficient level of provision. Experimental results suggest that, in practice, some participants are averse to giving without having complete information and – as a result – coarse messages may decrease welfare.

Date: 2017
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Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics) is currently edited by Ofer Azar

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