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Explanations

Author

Listed:
  • Thomas Graeber

    (Harvard Business)

  • Christopher Roth

    (University of Cologne, IZA, ECONtribute, CEPR, NHH, and Max-Planck Institute for Research on Collective Goods)

  • Constantin Schesch

    (Harvard Business School)

Abstract

When people exchange ideas, both truths and falsehoods can proliferate. We study the role of explanations for the spread of truths and falsehoods in 15 financial decision tasks. We pay participants to record the reasoning behind each of their answers, providing over 6,900 unique verbal explanations in total. A separate group of participants either only observe one orator’s choice or additionally listen to their explanation before making their own choice. Listening to explanations strongly improves aggregate accuracy. This effect is asymmetric: explanations enable the spread of truths, but do not curb the contagion of falsehoods. To study mechanisms, we extract every single argument provided in the explanations alongside a large collection of speech features, revealing the nature of financial reasoning on each topic. Explanations for truths exhibit a significantly richer message space and higher argument quality than explanations for falsehoods. These content differences in the supply of explanations for truths versus falsehoods account for 60% of their asymmetric benefit, whereas orator and receiver characteristics play a minor role.

Suggested Citation

  • Thomas Graeber & Christopher Roth & Constantin Schesch, 2024. "Explanations," ECONtribute Discussion Papers Series 291, University of Bonn and University of Cologne, Germany.
    • Handle: RePEc:ajk:ajkdps:291
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    References listed on IDEAS

    as
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    Keywords

    : Explanations; Social Learning; Speech Data; Financial Knowledge; Financial Reasoning;
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