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Information gatekeepers: theory and experimental evidence

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  • Isabelle Brocas
  • Juan Carrillo
  • Thomas Palfrey

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    Abstract

    We consider a model where two adversaries can spend resources in acquiring public information about the unknown state of the world in order to influence the choice of a decision maker. We characterize the sampling strategies of the adversaries in the equilibrium of the game. We show that as the cost of information acquisition for one adversary increases, that person collects less evidence whereas the other adversary collects more evidence. We then test the results in a controlled laboratory setting. The behavior of subjects is close to the theoretical predictions. Mistakes are relatively infrequent (15%). They occur in both directions, with a higher rate of over-sampling (39%) than under-sampling (8%). The main difference with the theory is the smooth decline in sampling around the theoretical equilibrium. Comparative statics are also consistent with the theory, with adversaries sampling more when their own cost is low and when the other adversary’s cost is high. Finally, there is little evidence of learning over the 40 matches of the experiment. Copyright Springer-Verlag 2012

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    Bibliographic Info

    Article provided by Springer in its journal Economic Theory.

    Volume (Year): 51 (2012)
    Issue (Month): 3 (November)
    Pages: 649-676

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    Handle: RePEc:spr:joecth:v:51:y:2012:i:3:p:649-676

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    Related research

    Keywords: Experimental design; Search; Information acquisition; Adversarial system; C91; D83;

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    1. Konrad, Kai A. & Kovenock, Dan, 2006. "Multi-battle contests," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 122, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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    7. Johannes Hörner, 2004. "A Perpetual Race to Stay Ahead," Review of Economic Studies, Wiley Blackwell, vol. 71(4), pages 1064-1088, October.
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