Faculty Seminar: Dr. Ginger Jin, Prof. University of Maryland and Director of the Federal Trade Commission's Bureau of Economics
This event is part of the Economics Seminar Series series.
Location:
Gerri C. LeBow Hall722
3220 Market Street
Philadelphia, PA 19104
Registration Option:
Is No News (Perceived as) Bad News? An Experimental Investigation of Information Disclosure Ginger Zhe Jin, Michael Luca, Daniel Martin
This paper uses laboratory experiments to directly test a central prediction of disclosure theory: that market forces can lead businesses to voluntarily provide information about the quality of their products. This theoretical prediction is based on unraveling arguments, which require that consumers hold correct beliefs about non-disclosed information. Instead, we find that receivers are insufficiently skeptical about non-disclosed information, and as a consequence, senders do not always disclose their private information. However, when subjects are informed about non-disclosed information after each round, behavior slowly converges to full unraveling. This convergence appears to be driven by an asymmetric response in receiver actions after learning that they were profitably deceived. Despite the change in receiver behavior, stated beliefs about sender strategies remain insufficiently skeptical, which suggests that while direct and immediate feedback induces equilibrium behavior, it does not reduce strategic naïveté.
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Teresa Harrison, PhD
Academic Director of the Center for Nonprofit Governance
(215) 895-0556
tdh28@drexel.eduGerri C. LeBow Hall 1021