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.
Authors
- Acknowledgements & Disclosure
- We thank Aislinn Bohren, Gabriel Carroll, Navin Kartik, Alex Wolitzky and various seminar participants for useful suggestions. Vellodi acknowledges funding from the EUR grant ANR-17-EURE-0001, as well as Princeton University, where this research was initiated in 2019. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
- DOI
- https://doi.org/10.3386/w32483
- Published in
- United States of America
