Hidden Testing and Selective Disclosure of Evidence

Claudia Herresthal ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: A decision maker faces an approval choice under uncertainty. An agent can gather information through sequential testing. Players agree on the optimal choice under certainty, but the decision maker has a higher approval standard than the agent. We compare the case where testing is hidden and the agent can choose whether to disclose his findings to the case where testing is observable. The agent can exploit the additional discretion under hidden testing to his advantage if and only if the decision maker is sufficiently inclined to approve. Hidden testing then yields a Pareto improvement over observable testing if the conflict between players is larger than some threshold, but leaves the decision maker worse off and the agent better off if the conflict is smaller than this threshold.

Keywords: endogenous information acquisition; verifiable disclosure; transparency; questionable research practices (search for similar items in EconPapers)
JEL-codes: D82 D83 (search for similar items in EconPapers)
Pages: 32
Date: 2021-06
New Economics Papers: this item is included in nep-ore
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2020_145v2

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