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Keeping in the Dark with Hard Evidence

Author

Listed:
  • Daniel Bird
  • Alexander Frug

Abstract

We present a dynamic learning setting in which the periodic data observed by the decision-maker is mediated by an agent. We study when, and to what extent, this mediation can distort the decision-maker's long-run learning, even though the agent's reports are restricted to consist of verifiable hard evidence and must adhere to certain standards. We introduce the manipulation-proof law of large numbers – that delivers a sharp dichotomy: when it holds, the decision-maker's learning is guaranteed in the long-run; when it fails, the scope for manipulation is essentially unrestricted.

Suggested Citation

  • Daniel Bird & Alexander Frug, 2025. "Keeping in the Dark with Hard Evidence," Working Papers 1534, Barcelona School of Economics.
    • Handle: RePEc:bge:wpaper:1534
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    References listed on IDEAS

    as
    1. Jung, Wo & Kwon, Yk, 1988. "Disclosure When The Market Is Unsure Of Information Endowment Of Managers," Journal of Accounting Research, John Wiley & Sons, Ltd., vol. 26(1), pages 146-153.
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    More about this item

    Keywords

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    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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