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Blind Disclosure

Author

Listed:
  • Aaron Kolb
  • Marilyn Pease
  • Daniel W. Sacks
  • Joshua Quick

Abstract

We develop and test a theory of blind disclosure. A sender chooses whether to disclose information based on a preliminary, private signal. In the unique equilibrium, contrary to the literature's canonical unraveling result, senders disclose only if their preliminary signal exceeds a cutoff. This cutoff rule leads to partial unraveling in environments with either risk aversion or moral hazard, and disclosure decreases with uncertainty. Using unique administrative data on disclosed and undisclosed grades in a large university, we find that the model is consistent with student choices during spring 2020 to conceal letter grades by switching to optional pass-fail grades.

Suggested Citation

  • Aaron Kolb & Marilyn Pease & Daniel W. Sacks & Joshua Quick, 2023. "Blind Disclosure," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 41-79, May.
    • Handle: RePEc:aea:aejmic:v:15:y:2023:i:2:p:41-79
    DOI: 10.1257/mic.20210182
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    More about this item

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions

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