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(Pro-)Social Learning and Strategic Disclosure

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  • Roland Bénabou

    (Princeton University, NBER - National Bureau of Economic Research [New York] - NBER - The National Bureau of Economic Research, CEPR - Center for Economic Policy Research, IZA - Forschungsinstitut zur Zukunft der Arbeit - Institute of Labor Economics, BREAD)

  • Nikhil Vellodi

    (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

We study a sequential experimentation model with endogenous feedback. Agents choose between a safe and risky action, the latter generating stochastic rewards. When making this choice, each agent is selfishly motivated (myopic). However, agents can disclose their experiences to a public record, and when doing so are pro-socially motivated (forward-looking). Disclosure is both polarized (only extreme signals are disclosed) and positively biased (no feedback is bad news). The extent of disclosure is non-monotone in prior uncertainty. Subsidizing disclosure costs can paradoxically lead to less disclosure, but more experimentation.

Suggested Citation

  • Roland Bénabou & Nikhil Vellodi, 2024. "(Pro-)Social Learning and Strategic Disclosure," PSE Working Papers halshs-04721035, HAL.
    • Handle: RePEc:hal:psewpa:halshs-04721035
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-04721035v1
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    References listed on IDEAS

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    1. Bikhchandani, Sushil & Hirshleifer, David & Welch, Ivo, 1992. "A Theory of Fads, Fashion, Custom, and Cultural Change in Informational Cascades," Journal of Political Economy, University of Chicago Press, vol. 100(5), pages 992-1026, October.
    2. Chris Nosko & Steven Tadelis, 2015. "The Limits of Reputation in Platform Markets: An Empirical Analysis and Field Experiment," NBER Working Papers 20830, National Bureau of Economic Research, Inc.
    3. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
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    More about this item

    Keywords

    Social learning; Experimentation; Dynamic disclosure; Consumer reviews; Time-inconsistent preferences; Motivated beliefs;
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