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Sharing Guilt: How Better Access to Information May Backfire

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  • Inderst, Roman

Abstract

We study strategic communication between a customer and an advisor who is privately informed about the best suitable choice for the customer, but whose preferences are misaligned with the customer's preferences. The advisor sends a message to the customer who, in turn, can secure herself from bad advice by acquiring costly information on her own. We find that making the customer's information acquisition less costly, e.g., through consumer protection regulation or digital information aggregation and dissemination, leads to less prosocial behavior of the advisor. This can be explained by a model of shared guilt, which predicts a shift in causal attribution of guilt from the advisor to the customer if the latter could have avoided her ex post disappointment.

Suggested Citation

  • Inderst, Roman, 2019. "Sharing Guilt: How Better Access to Information May Backfire," CEPR Discussion Papers 13711, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:13711
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    Cited by:

    1. Lucas C. Coffman & Alexander Gotthard-Real, 2019. "Moral Perceptions of Advised Actions," Management Science, INFORMS, vol. 65(8), pages 3904-3927, August.

    More about this item

    Keywords

    Advice; Guilt aversion; responsibility diffusion; shared guilt; Trust;

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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