Lost in Transmission
86 Pages Posted: 1 Feb 2024
There are 2 versions of this paper
Lost in Transmission
Date Written: 2024
Abstract
How does word-of-mouth transmission distort economic information? We pay participants to listen to audio recordings containing economic forecasts and accurately transmit the information through voice messages. Other participants listen to an original or a transmitted recording before stating incentivized beliefs. Across various transmitter incentive schemes, a forecast’s reliability is lost in transmission at a far higher rate than the forecast’s level. Reliable and unreliable information, once filtered through transmission, impact listener beliefs similarly. Mechanism experiments show that information about reliability is not perceived as less relevant or harder to transmit, but is less likely to come to mind during transmission.
Keywords: information transmission, word-of-mouth, narratives, reliability
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