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The Better is the Enemy of the Good

Christine L. Exley () and Judd Kessler
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Christine L. Exley: Harvard Business School
Judd Kessler: University of Pennsylvania

No 2017-068, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: In standard economic theory, information helps agents optimize. But providing agents with information about the benefits of an action often fails to encourage that action. This paper proposes a far-reaching behavioral explanation: information may make salient that the benefits of taking an action could be improved and agents may see the potential for improvement as a reason to avoid the action. In an experiment, making more salient how a donation could be improved significantly decreases giving. Self-serving motives dramatically magnify the effect, suggesting why information may be particularly ineffective at encouraging privately costly actions with social or future benefits.

Keywords: experiment; information acquisition; philanthropy (search for similar items in EconPapers)
JEL-codes: D83 C91 D64 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-exp
Date: 2017-09
Note: MIP
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