IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/1712.html
   My bibliography  Save this paper

Hidden Testing and Selective Disclosure of Evidence

Author

Listed:
  • Herresthal, C.

Abstract

This paper contrasts a decision maker's payoff under public and private information acquisition by a biased advisor. Both players agree on the optimal choice under certainty, but differ in how they trade off the loss from errors. The advisor can sequentially acquire informative test outcomes. If acquisition is private he decides in the final period which realizations to verifiably disclose. If players' preferences are sufficiently misaligned, the decision maker is weakly better off under private rather than public information acquisition. The effect on the advisor's payoff depends on the direction of his bias.

Suggested Citation

  • Herresthal, C., 2017. "Hidden Testing and Selective Disclosure of Evidence," Cambridge Working Papers in Economics 1712, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:1712
    Note: cush2
    as

    Download full text from publisher

    File URL: http://www.econ.cam.ac.uk/research-files/repec/cam/pdf/cwpe1712.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yeon-Koo Che & Navin Kartik, 2009. "Opinions as Incentives," Journal of Political Economy, University of Chicago Press, vol. 117(5), pages 815-860, October.
    2. repec:hal:spmain:info:hdl:2441/eu4vqp9ompqllr09iatr74eao is not listed on IDEAS
    3. Emeric Henry, 2009. "Disclosure of research results: the cost of proving your honesty," SciencePo Working papers Main hal-01023670, HAL.
    4. Emeric Henry, 2009. "Strategic Disclosure of Research Results: The Cost of Proving Your Honesty," Economic Journal, Royal Economic Society, vol. 119(539), pages 1036-1064, July.
    5. Alfredo Di Tillio & Marco Ottaviani & Peter Norman Sørensen, 2017. "Persuasion Bias in Science: Can Economics Help?," Economic Journal, Royal Economic Society, vol. 127(605), pages 266-304, October.
    6. Mike Felgenhauer & Petra Loerke, 2017. "Bayesian Persuasion With Private Experimentation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58, pages 829-856, August.
    7. Milgrom, Paul & Roberts, John, 1986. "Price and Advertising Signals of Product Quality," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 796-821, August.
    8. Daniel J. Seidmann & Eyal Winter, 1997. "Strategic Information Transmission with Verifiable Messages," Econometrica, Econometric Society, vol. 65(1), pages 163-170, January.
    9. Mike Felgenhauer & Petra Loerke, 2017. "Bayesian Persuasion With Private Experimentation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 58(3), pages 829-856, August.
    10. Mike Felgenhauer & Elisabeth Schulte, 2014. "Strategic Private Experimentation," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 74-105, November.
    11. Robert Dur & Otto H. Swank, 2005. "Producing and Manipulating Information," Economic Journal, Royal Economic Society, vol. 115(500), pages 185-199, January.
    12. Steven Matthews & Andrew Postlewaite, 1985. "Quality Testing and Disclosure," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 328-340, Autumn.
    13. Dino Gerardi & Leeat Yariv, 2008. "Costly Expertise," American Economic Review, American Economic Association, vol. 98(2), pages 187-193, May.
    14. Shin Hyun Song, 1994. "The Burden of Proof in a Game of Persuasion," Journal of Economic Theory, Elsevier, vol. 64(1), pages 253-264, October.
    15. Paul Milgrom, 2008. "What the Seller Won't Tell You: Persuasion and Disclosure in Markets," Journal of Economic Perspectives, American Economic Association, vol. 22(2), pages 115-131, Spring.
    16. Steven Shavell, 1994. "Acquisition and Disclosure of Information Prior to Sale," RAND Journal of Economics, The RAND Corporation, vol. 25(1), pages 20-36, Spring.
    17. Paul R. Milgrom, 1981. "Good News and Bad News: Representation Theorems and Applications," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 380-391, Autumn.
    18. Hao Li & Wing Suen, 2004. "Delegating Decisions to Experts," Journal of Political Economy, University of Chicago Press, vol. 112(S1), pages 311-335, February.
    19. Michael J. Fishman & Kathleen M. Hagerty, 1990. "The Optimal Amount of Discretion to Allow in Disclosure," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 105(2), pages 427-444.
    20. repec:hal:wpspec:info:hdl:2441/eu4vqp9ompqllr09iatr74eao is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Alfredo Di Tillio & Marco Ottaviani & Peter Norman Sørensen, 2021. "Strategic Sample Selection," Econometrica, Econometric Society, vol. 89(2), pages 911-953, March.
    2. Mike Felgenhauer & Fangya Xu, 2021. "The Face Value Of Arguments With And Without Manipulation," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 62(1), pages 277-293, February.
    3. Bobtcheff, Catherine & Levy, Raphaël & Mariotti, Thomas, 2021. "Negative results in science: Blessing or (winner's) curse ?," CEPR Discussion Papers 16024, C.E.P.R. Discussion Papers.
    4. Vasudha Jain & Mark Whitmeyer, 2021. "Whose Bias?," Papers 2111.10335, arXiv.org.
    5. Felgenhauer, Mike, 2021. "Experimentation and manipulation with preregistration," Games and Economic Behavior, Elsevier, vol. 130(C), pages 400-408.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herresthal, Claudia, 2022. "Hidden testing and selective disclosure of evidence," Journal of Economic Theory, Elsevier, vol. 200(C).
    2. Dahm, Matthias & González, Paula & Porteiro, Nicolás, 2018. "The enforcement of mandatory disclosure rules," Journal of Public Economics, Elsevier, vol. 167(C), pages 21-32.
    3. Gregor Martin, 2015. "To Invite or Not to Invite a Lobby, That Is the Question," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 15(2), pages 143-166, July.
    4. Martin Gregor, 2014. "Receiver's access fee for a single sender," Working Papers IES 2014/17, Charles University Prague, Faculty of Social Sciences, Institute of Economic Studies, revised May 2014.
    5. Bhattacharya, Sourav & Goltsman, Maria & Mukherjee, Arijit, 2018. "On the optimality of diverse expert panels in persuasion games," Games and Economic Behavior, Elsevier, vol. 107(C), pages 345-363.
    6. Hedlund, Jonas, 2017. "Bayesian persuasion by a privately informed sender," Journal of Economic Theory, Elsevier, vol. 167(C), pages 229-268.
    7. Hedlund, Jonas, 2014. "Bayesian signaling," Working Papers 0577, University of Heidelberg, Department of Economics.
    8. Felgenhauer, Mike, 2021. "Experimentation and manipulation with preregistration," Games and Economic Behavior, Elsevier, vol. 130(C), pages 400-408.
    9. Irene Valsecchi, 2013. "The expert problem: a survey," Economics of Governance, Springer, vol. 14(4), pages 303-331, November.
    10. Alfredo Di Tillio & Marco Ottaviani & Peter Norman Sørensen, 2021. "Strategic Sample Selection," Econometrica, Econometric Society, vol. 89(2), pages 911-953, March.
    11. Claude Fluet & Thomas Lanzi, 2021. "Cross-Examination," Working Papers of BETA 2021-40, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    12. Ting Liu & Monic Jiayin Sun, 2007. "Informal Payments in Developing Countries' Public Health Sectors¤," Boston University - Department of Economics - Working Papers Series WP2007-032, Boston University - Department of Economics.
    13. Mathis, Jérôme, 2008. "Full revelation of information in Sender-Receiver games of persuasion," Journal of Economic Theory, Elsevier, vol. 143(1), pages 571-584, November.
    14. Federico Echenique & Kevin He, 2021. "Screening $p$-Hackers: Dissemination Noise as Bait," Papers 2103.09164, arXiv.org, revised Mar 2024.
    15. Hedlund, Jonas, 2015. "Persuasion with communication costs," Games and Economic Behavior, Elsevier, vol. 92(C), pages 28-40.
    16. Shuo Liu & Dimitri Migrow, 2019. "Designing organizations in volatile markets," ECON - Working Papers 319, Department of Economics - University of Zurich.
    17. Emeric Henry & Marco Ottaviani, 2019. "Research and the Approval Process: The Organization of Persuasion," American Economic Review, American Economic Association, vol. 109(3), pages 911-955, March.
    18. Tianle Song, 2022. "Quality Disclosure and Product Selection," Journal of Industrial Economics, Wiley Blackwell, vol. 70(2), pages 323-346, June.
    19. Emeric Henry, 2009. "Strategic Disclosure of Research Results: The Cost of Proving Your Honesty," Economic Journal, Royal Economic Society, vol. 119(539), pages 1036-1064, July.
    20. Raphael Boleslavsky & Christopher Cotton, 2011. "Learning more by doing less," Working Papers 2012-1, University of Miami, Department of Economics.

    More about this item

    Keywords

    endogenous information acquisition; veriable disclosure; strategic experimentation; endogenous information acquisition; verifiable disclosure; transparency;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cam:camdae:1712. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.