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Information gatekeepers: theory and experimental evidence

  • Isabelle Brocas
  • Juan Carrillo
  • Thomas Palfrey

    ()

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    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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    File URL: http://hdl.handle.net/10.1007/s00199-011-0615-9
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    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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    1. Konrad, Kai A. & Kovenock, Dan, 2009. "Multi-battle contests," Games and Economic Behavior, Elsevier, vol. 66(1), pages 256-274, May.
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    6. Steven Matthews & Andrew Postlewaite, 1985. "Quality Testing and Disclosure," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 328-340, Autumn.
    7. Gary Charness & Dan Levin, 2005. "When Optimal Choices Feel Wrong: A Laboratory Study of Bayesian Updating, Complexity, and Affect," American Economic Review, American Economic Association, vol. 95(4), pages 1300-1309, September.
    8. Jeffrey Banks & David Porter & Mark Olson, 1997. "An experimental analysis of the bandit problem," Economic Theory, Springer, vol. 10(1), pages 55-77.
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