Closing the Gap: When Do Cues Eliminate Differences between Sophisticated and Unsophisticated Citizens?

Abstract

Relatively few scholars assess the conditions under which cues improve citizens’ decisions. I analyze experimentally the conditions under which one cue (the statements of an endorser) enables both sophisticated and unsophisticated citizens to improve their decisions. My results demonstrate that the effectiveness of this cue depends upon the endorser’s incentives and citizens’ levels of sophistication. Specifically, I find that under idealized conditions (i.e., when the endorser always has an incentive to make truthful statements), this cue dramatically improves the decisions of (and closes the gap between) sophisticated and unsophisticated subjects. When the endorser’s incentives are more realistic (i.e., the endorser may have an incentive to lie), this cue affects sophisticated versus unsophisticated subjects differently: sophisticated subjects do not improve their decisions, whereas unsophisticated subjects typically improve their decisions enough to make them comparable to sophisticated subjects. Thus, even under more realistic conditions, the gap between sophisticated and unsophisticated subjects closes.

Keywords: institution, cue, voter, sophistication, trust, endorsement, heuristic, experiment

JEL Classification: C90, C91, D72, D80, D81, D83