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Optional Disclosure and Observational Learning

Author

Listed:
  • Diefeng Peng
  • Yulei Rao
  • Xianming Sun
  • Erte Xiao

Abstract

Observational learning theories often assume that people’s actions can be observed. However, in many naturally-occurring environments, individuals can choose whether to disclose their behavior to others. We provide theoretical analysis of observational learning under optional disclosure conditions. We further examine empirically how individuals decide whether to reveal decisions. Although we find evidence for other-regarding disclosure behavior, our findings highlight the importance of providing public information about how the disclosure behavior affects others.

Suggested Citation

  • Diefeng Peng & Yulei Rao & Xianming Sun & Erte Xiao, 2019. "Optional Disclosure and Observational Learning," Monash Economics Working Papers 05-18, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2018-05
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    More about this item

    Keywords

    Observational learning; Information cascade; Optional disclosure; Other-regarding preferences;
    All these keywords.

    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
    • D64 - Microeconomics - - Welfare Economics - - - Altruism; Philanthropy; Intergenerational Transfers
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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