Is No News (Perceived as) Bad News? An Experimental Investigation of Information Disclosure

61 Pages Posted: 20 Apr 2015

See all articles by Ginger Zhe Jin

Ginger Zhe Jin

University of Maryland - Department of Economics; National Bureau of Economic Research (NBER)

Michael Luca

Harvard University - Business School (HBS)

Daniel Martin

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS)

Multiple version iconThere are 2 versions of this paper

Date Written: April 2015

Abstract

This paper uses laboratory experiments to directly test a central prediction of disclosure theory: that strategic forces can lead those who possess private information to voluntarily provide it. In a simple two-person disclosure game, we find that senders disclose favorable information, but withhold less favorable information. The degree to which senders withhold information is strongly related to their stated beliefs about receiver actions, and their stated beliefs are accurate on average. Receiver actions are also strongly related to their stated beliefs, but receiver actions and beliefs suggest they are insufficiently skeptical about non-disclosed information in the absence of repeated feedback.

Suggested Citation

Jin, Ginger Zhe and Luca, Michael and Martin, Daniel, Is No News (Perceived as) Bad News? An Experimental Investigation of Information Disclosure (April 2015). NBER Working Paper No. w21099, Available at SSRN: https://ssrn.com/abstract=2596428

Ginger Zhe Jin (Contact Author)

University of Maryland - Department of Economics ( email )

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National Bureau of Economic Research (NBER)

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Michael Luca

Harvard University - Business School (HBS) ( email )

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Daniel Martin

Northwestern University - Department of Managerial Economics and Decision Sciences (MEDS) ( email )

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Evanston, IL 60208
United States

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