What Will Be the Impact of Fintech on the Payment System? A Perspective from Money Creation

Hajime Tomura

No 2205, Working Papers from Waseda University, Faculty of Political Science and Economics

Abstract: This study investigates whether revealing others' actions canreduce polarization in the decontextualized settings of laboratory experiments. Despite wealth of studies on polarization, it has not been examined rigorously with varying treatments in laboratory settings. Theoretically, if people can infer others' private information through their actions, polarization should reduce for a policy that has common interests. To this end, we have conducted a novel laboratory experiment with a set of treatments theoretically derived. Our experiments show the following implications. First, when others' actions were revealed only once, polarization reduced in the short run, but increased in the long run. Second, when others' actions were revealed in all rounds, polarization reduced and almost disappeared. However, if participants thought that others had insufficient information, polarization persisted—even when others' actions were revealed in all rounds. In addition, a reduction in polarization is not necessary to increase participants' welfare since they may converge in the wrong direction. We apply our findings to real-world political issues including COVID-19 vaccination and cross-cutting views on social media and extend our discussions.

Keywords: belief polarization; laboratory experiments; asymmetric information (search for similar items in EconPapers)
JEL-codes: C92 D72 D82 D83 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2022-10
New Economics Papers: this item is included in nep-exp and nep-pay
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Working Paper: What Will Be the Impact of Fintech on the Payment System? A Perspective from Money Creation (2022)
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