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What Will Be the Impact of Fintech on the Payment System? A Perspective from Money Creation

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  • Hajime Tomura

    (Waseda University)

Abstract

This study investigates whether revealing others' actions canreduce polarization in the decontextualized settings of laboratory experiments. Despite wealth of studies on polarization, it has not been examined rigorously with varying treatments in laboratory settings. Theoretically, if people can infer others' private information through their actions, polarization should reduce for a policy that has common interests. To this end, we have conducted a novel laboratory experiment with a set of treatments theoretically derived. Our experiments show the following implications. First, when others' actions were revealed only once, polarization reduced in the short run, but increased in the long run. Second, when others' actions were revealed in all rounds, polarization reduced and almost disappeared. However, if participants thought that others had insufficient information, polarization persisted—even when others' actions were revealed in all rounds. In addition, a reduction in polarization is not necessary to increase participants' welfare since they may converge in the wrong direction. We apply our findings to real-world political issues including COVID-19 vaccination and cross-cutting views on social media and extend our discussions.

Suggested Citation

  • Hajime Tomura, 2022. "What Will Be the Impact of Fintech on the Payment System? A Perspective from Money Creation," Working Papers 2205, Waseda University, Faculty of Political Science and Economics.
    • Handle: RePEc:wap:wpaper:2205
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    References listed on IDEAS

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    1. Markus Noth & Martin Weber, 2003. "Information Aggregation with Random Ordering: Cascades and Overconfidence," Economic Journal, Royal Economic Society, vol. 113(484), pages 166-189, January.
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    9. Radnitz, Scott & Underwood, Patrick, 2017. "Is Belief in Conspiracy Theories Pathological? A Survey Experiment on the Cognitive Roots of Extreme Suspicion," British Journal of Political Science, Cambridge University Press, vol. 47(1), pages 113-129, January.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    belief polarization; laboratory experiments; asymmetric information;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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