Is Ignorance Bliss? Information Avoidance and Private Provision of Public Goods

39 Pages Posted: 7 Nov 2019

See all articles by Yuanhao Li

Yuanhao Li

Norwegian School of Economics (NHH), Department of Economics, Students

Klaas van 't Veld

University of Wyoming - Department of Economics

Jason F. Shogren

University of Wyoming

Date Written: October 28, 2019

Abstract

Policymakers interested in increasing private provision of public goods have been attempting to improve information availability, so as to enhance individuals’ ability to make socially responsible choices. Nevertheless, individuals are often observed to contribute to public goods without knowing much about the public-good generating process. This observation raises important questions about how to best use information as a policy tool. Using eco-labeling as a motivating example, this paper builds a theoretical model suggesting that (1) individuals may prefer to avoid information about how much their efforts contribute to a public good even if the information can be acquired costlessly; (2) policymakers unaware of such behavior may achieve a suboptimal outcome—in particular, forcing information on individuals may result in suboptimal public-good provision and decreased welfare; and (3) policymakers may need new mechanisms to elicit individuals’ information preferences.

Keywords: information avoidance, public-good provision, information disclosure, eco-labeling

JEL Classification: D03, D83, H41

Suggested Citation

Li, Yuanhao and van 't Veld, Klaas and Shogren, Jason F., Is Ignorance Bliss? Information Avoidance and Private Provision of Public Goods (October 28, 2019). Available at SSRN: https://ssrn.com/abstract=3476665 or http://dx.doi.org/10.2139/ssrn.3476665

Yuanhao Li

Norwegian School of Economics (NHH), Department of Economics, Students ( email )

Helleveien 30
Bergen
Norway

Klaas Van 't Veld (Contact Author)

University of Wyoming - Department of Economics ( email )

College of Business Department 3985
1000 E. University Ave.
Laramie, WY Wyoming 82071
United States
+1 307-766-4028 (Fax)

HOME PAGE: http://www.uwyo.edu/economics/faculty-staff/faculty/klaas-t-vantveld.html

Jason F. Shogren

University of Wyoming ( email )

Department of Economics
BU292
Laramie, WY 82071-3985
United States
307-766-5430 (Phone)
307-766-5090 (Fax)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
53
Abstract Views
379
rank
453,023
PlumX Metrics