Information Gatekeepers: Theory and Experimental Evidence
University of Southern California - Department of Economics
Juan D. Carrillo
University of Southern California - Department of Economics; Centre for Economic Policy Research (CEPR)
Thomas R. Palfrey
California Institute of Technology - Division of the Humanities and Social Sciences
CEPR Discussion Paper No. DP7457
We consider a model where two adversaries can spend resources in acquiring public information about the unknown state of the world in order to influence the choice of a decision maker. We characterize the sampling strategies of the adversaries in the equilibrium of the game. We show that, as the cost of information acquisition for one adversary increases, that person collects less evidence whereas the other adversary collects more evidence. We then test the results in a controlled laboratory setting. The behavior of subjects is close to the theoretical predictions. Mistakes are relatively infrequent (15%). They occur in both directions, with more over-sampling (39%) than under-sampling (8%). The main difference with the theory is the smooth decline in sampling around the theoretical equilibrium. Comparative statics are also consistent with the theory, with adversaries sampling more when their own cost is low and when the other adversary's cost is high. Finally, there is little evidence of learning over the 40 matches of the experiment.
Number of Pages in PDF File: 38
Keywords: adversarial system, experiment, information acquisition, search
JEL Classification: C91, D83working papers series
Date posted: October 7, 2009
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