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

79 Pages Posted: 13 Jun 2018

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

Date Written: June 2018

Abstract

How should policymakers disseminate information: by broadcasting it widely (e.g., via mass media), or letting word spread from a small number of initially informed “seed” individuals? While conventional wisdom suggests delivering information more widely is better, we show theoretically and experimentally that this may not hold when people need to ask questions to fully comprehend the information they were given. In a field experiment during the chaotic 2016 Indian demonetization, we varied how information about demonetization’s official rules was delivered to villages on two dimensions: how many were initially informed (broadcasting versus seeding) and whether the identity of the initially informed was 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. Our results are consistent with four predictions of a model in which people need others’ help to make the best use of announced information, but worry about signaling inability or unwillingness to correctly process the information they have access to. First, if who is informed is not publicized, broadcasting improves all three outcomes relative to seeding. Second, under seeding, publicizing who is informed improves all three outcomes. Third, when broadcasting, publicizing who is informed hurts along all three dimensions. Finally, when who is informed is made public, telling more individuals (broadcasting relative to seeding) is worse along all three dimensions.

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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 (June 2018). NBER Working Paper No. w24679. Available at SSRN: https://ssrn.com/abstract=3194833

Abhijit V. Banerjee (Contact Author)

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

Harvard University ( email )

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

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