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

100 Pages Posted: 21 May 2018 Last revised: 3 Jan 2022

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

Northwestern 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 broadcasting (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 when incentives to seek information are endogenous, this is not necessarily true. In a field experiment during the 2016 Indian demonetization, we varied how information about the policy was delivered to villages along three dimensions: how many people were initially informed (i.e., broadcasting versus seeding); whether the identities of the initially informed were made common knowledge; and number of facts delivered (2 versus 24). The quality of information aggregation is measured in three ways: the volume of conversations about demonetization, the level of knowledge about demonetization rules, and the likelihood of making the correct choice in a strongly incentivized decision where understanding the rules is key. Under common knowledge, seeding dominates broadcasting. Moreover, common knowledge makes seeding more effective but broadcast less so. These comparisons hold for all three outcomes and underscore the importance of the incentive to engage in social learning. Using data on differential behavior across different ability categories, we interpret our results via a model of image concerns, and also consider several alternative explanations.

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 )

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Room E52-252D
Cambridge, MA 02142
United States
617-253-8855 (Phone)
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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)

Northwestern University ( email )

Evanston, IL 60201
United States

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