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When Less Is More: Experimental Evidence on Information Delivery During India’s Demonetisation

Author

Listed:
  • Abhijit Banerjee
  • Emily Brez
  • Arun G Chandrasekhar
  • Benjamin Golub

Abstract

In disseminating information, policymakers face a choice between broadcasting to everyone and informing a small number of “seeds” who then spread the message. While broadcasting maximises the initial reach of messages, we offer theoretical and experimental evidence that it need not be the best strategy. In a field experiment during the 2016 Indian demonetisation, we delivered policy information, varying three dimensions of the delivery method at the village level: initial reach (broadcasting versus seeding); whether or not we induced common knowledge of who was initially informed; and number of facts delivered. We measured three outcomes: the volume of conversations about demonetisation, knowledge of demonetisation rules, and choice quality in a strongly incentivised policy-dependent decision. On all three outcomes, under common knowledge, seeding dominates broadcasting; moreover, adding common knowledge makes seeding more effective but broadcasting less so. We interpret our results via a model of image concerns deterring engagement in social learning, and we support this interpretation with evidence on differential behaviour across ability categories.

Suggested Citation

  • Abhijit Banerjee & Emily Brez & Arun G Chandrasekhar & Benjamin Golub, 2024. "When Less Is More: Experimental Evidence on Information Delivery During India’s Demonetisation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 91(4), pages 1884-1922.
    • Handle: RePEc:oup:restud:v:91:y:2024:i:4:p:1884-1922.
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    File URL: http://hdl.handle.net/10.1093/restud/rdad068
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    Cited by:

    1. Emerick, Kyle & Kelley, Erin & De Janvry, Alain & Sadoulet, Elisabeth, 2019. "Endogenous Information Sharing and the Gains from Using Network Information to Maximize Technology Adoption," CEPR Discussion Papers 13507, C.E.P.R. Discussion Papers.
    2. Lori Beaman & Ariel BenYishay & Jeremy Magruder & Ahmed Mushfiq Mobarak, 2021. "Can Network Theory-Based Targeting Increase Technology Adoption?," American Economic Review, American Economic Association, vol. 111(6), pages 1918-1943, June.
    3. de Janvry, Alain & Sadoulet, Elisabeth, 2020. "Using agriculture for development: Supply- and demand-side approaches," World Development, Elsevier, vol. 133(C).
    4. BenYishay, Ariel & Jones, Maria & Kondylis, Florence & Mobarak, Ahmed Mushfiq, 2020. "Gender gaps in technology diffusion," Journal of Development Economics, Elsevier, vol. 143(C).
    5. Khanna, Gaurav & Mukherjee, Priya, 2023. "Political accountability for populist policies: Lessons from the world’s largest democracy," Journal of Public Economics, Elsevier, vol. 219(C).
    6. Gabriel Chodorow-Reich & Gita Gopinath & Prachi Mishra & Abhinav Narayanan, 2020. "Cash and the Economy: Evidence from India’s Demonetization," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(1), pages 57-103.
    7. Chowdhury, Shyamal & Satish, Varun & Sulaiman, Munshi & Sun, Yi, 2021. "Sooner Rather Than Later: Social Networks and Technology Adoption," IZA Discussion Papers 14307, Institute of Labor Economics (IZA).
    8. Edoardo Chiarotti & Nathalie Monnet, 2019. "Hit them in the Wallet! An Analysis of the Indian Demonetization as a Counter-Insurgency Policy," IHEID Working Papers 03-2019, Economics Section, The Graduate Institute of International Studies.
    9. Chowdhury, Shyamal & Satish, Varun & Sulaiman, Munshi & Sun, Yi, 2022. "Sooner rather than later: Social networks and technology adoption," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 466-482.
    10. Rösl, Gerhard & Seitz, Franz, 2022. "On the stabilizing role of cash for societies," IMFS Working Paper Series 167, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    11. S. Nageeb Ali & Ayal Chen-Zion & Erik Lillethun, 2020. "Reselling Information," Papers 2004.01788, arXiv.org, revised Dec 2022.
    12. Islam, Asadul & Ushchev, Philip & Zenou, Yves & Zhang, Xin, 2019. "The Value of Information in Technology Adoption," IZA Discussion Papers 12672, Institute of Labor Economics (IZA).
    13. Zenou, Yves & Islam, Asad & Ushchev, Philip & Zhang, Xin, 2018. "The Value of Information in Technology Adoption: Theory and Evidence from Bangladesh," CEPR Discussion Papers 13419, C.E.P.R. Discussion Papers.
    14. Arun G. Chandrasekhar & Benjamin Golub & He Yang, 2018. "Signaling, Shame, and Silence in Social Learning," NBER Working Papers 25169, National Bureau of Economic Research, Inc.
    15. Steven Wilkins Reeves & Shane Lubold & Arun G. Chandrasekhar & Tyler H. McCormick, 2024. "Model-Based Inference and Experimental Design for Interference Using Partial Network Data," Papers 2406.11940, arXiv.org.

    More about this item

    Keywords

    Information diffusion; Social learning; Common knowledge; Demonetisation;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • G41 - Financial Economics - - Behavioral Finance - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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