IDEAS home Printed from https://ideas.repec.org/a/bla/randje/v54y2023i2p360-384.html
   My bibliography  Save this article

The wrong kind of information

Author

Listed:
  • Aditya Kuvalekar
  • João Ramos
  • Johannes Schneider

Abstract

Agents, some with a bias, decide between undertaking a risky project and a safe alternative based on information about the project's efficiency. Only a part of that information is verifiable. Unbiased agents want to undertake only efficient projects, but biased agents want to undertake any project. If the project causes harm, a court examines the verifiable information, forms a belief about the agent's type, and decides the punishment. Tension arises between deterring inefficient projects and a chilling effect on using the unverifiable information. Improving the unverifiable information always increases overall efficiency, but improving the verifiable information may reduce efficiency.

Suggested Citation

  • Aditya Kuvalekar & João Ramos & Johannes Schneider, 2023. "The wrong kind of information," RAND Journal of Economics, RAND Corporation, vol. 54(2), pages 360-384, June.
    • Handle: RePEc:bla:randje:v:54:y:2023:i:2:p:360-384
    DOI: 10.1111/1756-2171.12440
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/1756-2171.12440
    Download Restriction: no
    File URL: https://libkey.io/10.1111/1756-2171.12440?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andrea Prat, 2005. "The Wrong Kind of Transparency," American Economic Review, American Economic Association, vol. 95(3), pages 862-877, June.
    2. Garoupa, Nuno, 1999. "The economics of political dishonesty and defamation," International Review of Law and Economics, Elsevier, vol. 19(2), pages 167-180, June.
    3. Aaron Chalfin & Justin McCrary, 2017. "Criminal Deterrence: A Review of the Literature," Journal of Economic Literature, American Economic Association, vol. 55(1), pages 5-48, March.
    4. Jesse Bull & Joel Watson, 2019. "Statistical evidence and the problem of robust litigation," RAND Journal of Economics, RAND Corporation, vol. 50(4), pages 974-1003, December.
    5. Roger Lagunoff, 2001. "A Theory of Constitutional Standards and Civil Liberty," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(1), pages 109-132.
    6. Benjamin Lester & Nicola Persico & Ludo Visschers, 2012. "Information Acquisition and the Exclusion of Evidence in Trials," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(1), pages 163-182.
    7. Jordi Blanes I Vidal & Marc Möller, 2007. "When Should Leaders Share Information with Their Subordinates?," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 16(2), pages 251-283, June.
    8. Louis Kaplow, 2011. "On the Optimal Burden of Proof," Journal of Political Economy, University of Chicago Press, vol. 119(6), pages 1104-1140.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aditya Kuvalekar & Jo~ao Ramos & Johannes Schneider, 2021. "The Wrong Kind of Information," Papers 2111.04172, arXiv.org, revised Jun 2022.
    2. Lundberg, Alexander & Mungan, Murat, 2022. "The effect of evidentiary rules on conviction rates," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 563-576.
    3. Sergei Guriev & Anton Suvorov, 2010. "Why Less Informed Managers May Be Better Leaders," Working Papers w0142, New Economic School (NES).
    4. Qiang Fu & Ming Li & Xue Qiao, 2022. "On the paradox of mediocracy," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(2), pages 492-521, April.
    5. Yeon-Koo Che & Wouter Dessein & Navin Kartik, 2013. "Pandering to Persuade," American Economic Review, American Economic Association, vol. 103(1), pages 47-79, February.
    6. Andina-Díaz, Ascensión & García-Martínez, José A., 2020. "Reputation and news suppression in the media industry," Games and Economic Behavior, Elsevier, vol. 123(C), pages 240-271.
    7. Tom Kirchmaier & Stephen Machin & Matteo Sandi & Robert Witt, 2020. "Prices, Policing and Policy: The Dynamics of Crime Booms and Busts," Journal of the European Economic Association, European Economic Association, vol. 18(2), pages 1040-1077.
    8. Jacques Crémer, 2010. "Arm's-Length Relationships without Moral Hazard," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 377-387, 04-05.
    9. Sandra V. Rozo & Therese Anders & Steven Raphael, 2021. "Deportation, crime, and victimization," Journal of Population Economics, Springer;European Society for Population Economics, vol. 34(1), pages 141-166, January.
    10. V. Bhaskar & Caroline Thomas, 2019. "The Culture of Overconfidence," American Economic Review: Insights, American Economic Association, vol. 1(1), pages 95-110, June.
    11. Anna Bindler & Nadine Ketel, 2022. "Scaring or Scarring? Labor Market Effects of Criminal Victimization," Journal of Labor Economics, University of Chicago Press, vol. 40(4), pages 939-970.
    12. Aleksei Smirnov & Egor Starkov, 2019. "Timing of predictions in dynamic cheap talk: experts vs. quacks," ECON - Working Papers 334, Department of Economics - University of Zurich.
    13. Gilles Grolleau & Murat C. Mungan & Naoufel Mzoughi, 2024. "Punishment menus and their deterrent effects: an exploratory analysis," European Journal of Law and Economics, Springer, vol. 58(1), pages 1-19, August.
    14. Galiani, Sebastian & Jaitman, Laura & Weinschelbaum, Federico, 2020. "Crime and durable goods," Journal of Economic Behavior & Organization, Elsevier, vol. 173(C), pages 146-163.
    15. Pritam, Kocherlakota Satya & Sugandha, & Mathur, Trilok & Agarwal, Shivi, 2021. "Underlying dynamics of crime transmission with memory," Chaos, Solitons & Fractals, Elsevier, vol. 146(C).
    16. Matthias Kasper & James Alm, 2022. "Does the Bomb-crater Effect Really Exist? Evidence from the Laboratory," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 78(1-2), pages 87-111.
    17. Marie Claire Villeval, 2019. "Comportements (non) éthiques et stratégies morales," Revue économique, Presses de Sciences-Po, vol. 70(6), pages 1021-1046.
    18. Tealde, Emiliano, 2020. "The Unequal Impact of Natural Light on Crime," GLO Discussion Paper Series 663, Global Labor Organization (GLO).
    19. Stephen Hansen & Michael McMahon & Andrea Prat, 2018. "Transparency and Deliberation Within the FOMC: A Computational Linguistics Approach," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(2), pages 801-870.
    20. David Bholat & Stephen Hans & Pedro Santos & Cheryl Schonhardt-Bailey, 2015. "Text mining for central banks," Handbooks, Centre for Central Banking Studies, Bank of England, number 33, April.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:randje:v:54:y:2023:i:2:p:360-384. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/randdus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.