Voluntary Disclosure of Information and Cooperation in Simultaneous-Move Economic Interactions

This paper studies individuals’ voluntary disclosure of past behaviors and its effects in simultaneous-move dilemma interactions. Using a laboratory experiment with a finitely repeated two-player public goods game, I found that voluntary information disclosure strengthens cooperation under certain conditions, although a non-negligible fraction of individuals do not disclose information about the past and proceed to behave opportunistically. On closer inspection, the data revealed that the material incentives of disclosure acts differ according to the matching protocol. Specifically, disclosers receive higher payoffs than non-disclosers if the disclosers are assured to be matched with like-minded disclosers; conversely, disclosers are vulnerable to exploitation by others under random matching. A direct consequence of the presence of non-disclosers (and the required payment in costly disclosure treatments) is that individuals can achieve higher efficiency where disclosure is mandatory rather than voluntary. This result suggests that the elimination of an option to hide past behaviors helps enhance economic efficiency if individuals’ opportunistic behaviors are liable to precipitate a collapse in the community norms.