Welfare in Experimental News Markets

Andrea Albertazzi, Matteo Ploner and Federico Vaccari

No 5j2w8, SocArXiv from Center for Open Science

Abstract: We perform a controlled experiment to study the welfare effects of competition in a strategic communication environment. Two equally informed senders with conflicting interests can misreport information at a cost that is increasing in the size of the lie. We compare a treatment where only one sender communicates with a treatment where both senders communicate simultaneously with a decision-maker. We find that the introduction of competition between senders decreases the welfare of all players. Competing senders reveal the truth less often and spend about twice the amount of resources to misreport information than their monopolistic counterpart. As a result, decision-makers take more informed choices when consulting one sender than when consulting both.

Date: 2021-08-26
New Economics Papers: this item is included in nep-com, nep-exp, nep-gth, nep-isf and nep-mic
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Related works:
Working Paper: Welfare in Experimental News Markets (2022)
Working Paper: Welfare in Experimental News Markets (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:5j2w8

DOI: 10.31219/osf.io/5j2w8

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