Kraemer, Carlo () (Lehrstuhl für ABWL, Finanzwirtschaft, insb. Bankbetriebslehre) Nöth, Markus () (Lehrstuhl für ABWL, Finanzwirtschaft, insb. Bankbetriebslehre) Weber, Martin () (Lehrstuhl für ABWL, Finanzwirtschaft, insb. Bankbetriebslehre)
Abstract
The cost of information is an often ignored factor in economic situations although the information acquisition behavior of the decision makers has a crucial influence on the outcome. In this experiment, we study an information aggregation process in which participants decide in a random sequence. Participants observe predecessors decisions and can acquire additional private information at a fixed price. We analyze participants information acquisition behavior and updating procedures. About one half of the individuals act rationally, whereas the other participants systematically overestimate the private signal value. This leads to excessive signal acquisitions and reduced conformity.
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Publisher Info
Paper provided by Sonderforschungsbereich 504, Universität Mannheim & Sonderforschungsbereich 504, University of Mannheim in its series Sonderforschungsbereich 504 Publications with number
00-35.
Length: 45 pages Date of creation: 21 Jul 2000 Date of revision: Handle: RePEc:xrs:sfbmaa:00-35
Note: The authors gratefully acknowledge the financial support for this research, which was provided by the Deutsche Forschungsgemeinschaft (grant We993/7-2). Markus Nöth is grateful to the finance department at the Wharton School for their hospitality. Helpful comments were received from Frank Voßmann, Charles Plott, Amnon Rapoport, from participants at the GEW meeting, ESA European Regional meeting in 1999, the 1 st Asian Conference on Experimental Business Research and from seminar participants at the University of Zürich, University of Toulouse and Fuqua Business School. Contact details of provider: Postal: D-68131 Mannheim Phone: (49) (0) 621-292-2547 Fax: (49) (0) 621-292-5594 Email: Web page: http://www.sfb504.uni-mannheim.de/ More information through EDIRC
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