Post by arfanho7 on Feb 24, 2024 10:26:02 GMT
Even so businesses typically decide how much or what kind of information to disclose to buyers. When a business chooses not to disclose information customers must then infer whether no news is good news or bad news. Through a series of experiments this paper shows that consumers systematically underestimate the extent to which no news is bad news and sellers take advantage of this by strategically withholding unfavorable information.
Author Abstract A central prediction of information economics is that market forces can lead businesses to voluntarily provide information about the quality of their products yet little voluntary disclosure is observed in the field. In this paper we demonstrate that the inconsistency between theory and reality is driven by a fundamental failure in consumer inferences when sellers withhold information. Using a series of laboratory Egypt WhatsApp Number List experiments we implement a simple disclosure game in which senders can verifiably report quality to receivers. We find that senders disclose less often than equilibrium would predict. Receivers are not sufficiently skeptical about undisclosed information they underestimate the extent to which no news is bad news. Senders generally take advantage of receiver mistakes.
We find that providing disclosure rates by quality score helps to improve receiver inferences. Paper Information Full Working Paper Text pdf Working Paper Publication Date April HBS Working Paper Number Faculty Unit s Negotiation Organizations Markets TRENDING FEB RESEARCH IDEAS IS YOUR WORKPLACE BIASED AGAINST INTROVERTS FEB RESEARCH IDEAS BREAKING THROUGH THE SELF DOUBT FEB RESEARCH IDEAS THE MIDDLE MANAGER OF THE FUTURE MORE COACHING LESS COMMANDING JAN OP ED WHY BOEING’S PROBLEMS WITH THE MAX BEGAN MORE THAN YEARS AGO JAN RESEARCH IDEAS MORE PROOF THAT MONEY CAN BUY HAPPINESS OR A LIFE WITH LESS STRESS Michael Luca MICHAEL LUCA Lee.
Author Abstract A central prediction of information economics is that market forces can lead businesses to voluntarily provide information about the quality of their products yet little voluntary disclosure is observed in the field. In this paper we demonstrate that the inconsistency between theory and reality is driven by a fundamental failure in consumer inferences when sellers withhold information. Using a series of laboratory Egypt WhatsApp Number List experiments we implement a simple disclosure game in which senders can verifiably report quality to receivers. We find that senders disclose less often than equilibrium would predict. Receivers are not sufficiently skeptical about undisclosed information they underestimate the extent to which no news is bad news. Senders generally take advantage of receiver mistakes.
We find that providing disclosure rates by quality score helps to improve receiver inferences. Paper Information Full Working Paper Text pdf Working Paper Publication Date April HBS Working Paper Number Faculty Unit s Negotiation Organizations Markets TRENDING FEB RESEARCH IDEAS IS YOUR WORKPLACE BIASED AGAINST INTROVERTS FEB RESEARCH IDEAS BREAKING THROUGH THE SELF DOUBT FEB RESEARCH IDEAS THE MIDDLE MANAGER OF THE FUTURE MORE COACHING LESS COMMANDING JAN OP ED WHY BOEING’S PROBLEMS WITH THE MAX BEGAN MORE THAN YEARS AGO JAN RESEARCH IDEAS MORE PROOF THAT MONEY CAN BUY HAPPINESS OR A LIFE WITH LESS STRESS Michael Luca MICHAEL LUCA Lee.