Testing, Disclosure and Approval

26 Pages Posted: 12 Nov 2016 Last revised: 25 Jan 2020

See all articles by Jacopo Bizzotto

Jacopo Bizzotto

Oslo Business School - OsloMet

Jesper Rüdiger

Charles III University of Madrid - Department of Business Administration

Adrien Vigier

University of Oxford - Department of Economics

Date Written: October 1, 2019

Abstract

Certifiers often base their decisions on a mixture of information, some of which is voluntarily disclosed by applicants, and some of which they acquire by way of tests or otherwise. We study the interplay between the information acquisition of certifiers and the information disclosure of applicants. We show that the inability of a certifier to commit to the amount of information to be acquired can result in a reduction of information disclosed. Among other consequences, given the choice between two information acquisition technologies, the certifier may prefer to commit to the inferior technology, in the sense of being either more expensive or less accurate.

Keywords: Information Acquisition; Testing; Disclosure; Certification

JEL Classification: C72, D82, D83, G24, G28

Suggested Citation

Bizzotto, Jacopo and Rüdiger, Jesper and Vigier, Adrien, Testing, Disclosure and Approval (October 1, 2019). Available at SSRN: https://ssrn.com/abstract=2868042 or http://dx.doi.org/10.2139/ssrn.2868042

Jacopo Bizzotto

Oslo Business School - OsloMet ( email )

Pilestredet 35
Oslo, 0166
Norway

Jesper Rüdiger (Contact Author)

Charles III University of Madrid - Department of Business Administration ( email )

Calle Madrid 126
Getafe, Madrid, Madrid 28903
Spain

Adrien Vigier

University of Oxford - Department of Economics ( email )

Manor Road Building
Manor Road
Oxford, OX1 3BJ
United Kingdom

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