When Less is More: Experimental Evidence on Information Delivery During India's Demonetization

94 Pages Posted: 21 May 2018 Last revised: 22 Jul 2019

See all articles by Abhijit V. Banerjee

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics

Emily Breza

Harvard University

Arun G. Chandrasekhar

Stanford University - Department of Economics

Benjamin Golub

Harvard University

Multiple version iconThere are 2 versions of this paper

Date Written: May 10, 2019

Abstract

How should information be disseminated to large populations? The options include broadcasts (e.g., via mass media) and informing a small number of "seeds" who then spread the message. While it may seem natural to try to reach the maximum number of people from the beginning, we show, theoretically and experimentally, that information frictions can reverse this result when incentives to seek are endogenous to the information policy. In a field experiment during the chaotic 2016 Indian demonetization, we varied how information about the policy was delivered to villages along two dimensions: how many people were initially informed (i.e. broadcasting versus seeding) and whether the identities of the initially informed were publicly disclosed (common knowledge). The quality of information aggregation is measured in three ways: the volume of conversations about demonetization, the level of knowledge about demonetization rules, and choice quality in a strongly incentivized decision dependent on understanding the rules. Under common knowledge, broadcasting performs worse and seeding performs better (relative to no common knowledge). Moreover, with common knowledge, seeding is the more effective strategy of the two. These comparisons hold on all three outcomes.

Suggested Citation

Banerjee, Abhijit V. and Breza, Emily and Chandrasekhar, Arun G. and Golub, Benjamin, When Less is More: Experimental Evidence on Information Delivery During India's Demonetization (May 10, 2019). Available at SSRN: https://ssrn.com/abstract=3163930 or http://dx.doi.org/10.2139/ssrn.3163930

Abhijit V. Banerjee

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Room E52-252D
Cambridge, MA 02142
United States
617-253-8855 (Phone)
617-253-6915 (Fax)

Emily Breza

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

Arun G. Chandrasekhar

Stanford University - Department of Economics ( email )

Landau Economics Building
579 Serra Mall
Stanford, CA 94305-6072
United States

Benjamin Golub (Contact Author)

Harvard University ( email )

Littauer Center, Dept of Economics
1805 Cambridge Street
Cambridge, MA 02138
United States

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