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Privacy concerns, voluntary disclosure of information, and unraveling: An experiment

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  • Benndorf, Volker
  • Kübler, Dorothea
  • Normann, Hans-Theo

Abstract

We study the voluntary revelation of private information in a labor-market experiment where workers can reveal their productivity at a cost. While rational revelation improves a worker׳s payoff, it imposes a negative externality on others and may trigger further revelation. Such unraveling can be observed frequently in our data although less often than predicted. Equilibrium play is more likely when subjects are predicted to conceal their productivity than when they should reveal. This tendency of under-revelation, especially of low-productivity workers, is consistent with the level-k model. A loaded frame where the private information concerns the workers׳ health status leads to less revelation than a neutral frame.

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  • Benndorf, Volker & Kübler, Dorothea & Normann, Hans-Theo, 2015. "Privacy concerns, voluntary disclosure of information, and unraveling: An experiment," European Economic Review, Elsevier, vol. 75(C), pages 43-59.
  • Handle: RePEc:eee:eecrev:v:75:y:2015:i:c:p:43-59
    DOI: 10.1016/j.euroecorev.2015.01.005
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    More about this item

    Keywords

    Information revelation; Level-k reasoning; Privacy;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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