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The Better is the Enemy of the Good

Listed author(s):
  • Christine L. Exley

    ()

    (Harvard Business School, Negotiation, Organizations & Markets Unit)

  • Judd B. Kessler

    ()

    (The Wharton School, University of Pennsylvania.)

Registered author(s):

    In standard economic theory, information helps agents optimize. But providing agents with information about the benefits of an action often fails to encourage that action. This paper proposes a far-reaching behavioral explanation: information may make salient that the benefits of taking an action could be improved and agents may see the potential for improvement as a reason to avoid the action. In an experiment, making more salient how a donation could be improved significantly decreases giving. Self-serving motives dramatically magnify the effect, suggesting why information may be particularly ineffective at encouraging privately costly actions with social or future benefits.

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    File URL: http://www.hbs.edu/faculty/pages/download.aspx?name=18-017.pdf
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    Paper provided by Harvard Business School in its series Harvard Business School Working Papers with number 18-017.

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    Length: 52 pages
    Date of creation: Aug 2017
    Handle: RePEc:hbs:wpaper:18-017
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