Forthcoming : (Pro)-Social Learning and Strategic Disclosure

Journal article: We study a sequential experimentation model with endogenous feedback. Agents choose between a safe and risky action, the latter generating stochastic rewards. When making this choice, each agent is selfishly motivated (myopic). However, agents can disclose their experiences to a public record, and when doing so are pro-socially motivated (forward-looking). When prior uncertainty is large, disclosure is both polarized (only extreme signals are disclosed) and positively biased (no feedback is bad news). When prior uncertainty is small, a novel form of unraveling occurs and disclosure is complete. Subsidizing disclosure costs can perversely lead to less disclosure but more experimentation.

Author(s)

Nikhil Vellodi, Roland Bénabou

Journal
  • American Economic Journal: Microeconomics
Date of publication
  • 2025
Keywords JEL
D82 L11 L12
Keywords
  • Social learning
  • Experimentation
  • Dynamic disclosure
  • Consumer reviews
  • Time-inconsistent preferences
  • Motivated beliefs
Version
  • 1