Dynamic Evidence Disclosure: Delay the Good to Accelerate the Bad
It may be individually optimal to wait and learn from the experiences of others before investing in a new technology. However, informational free-riding is collectively harmful as it slows down innovation adoption. This paper studies the dynamic tradeoff between disclosure and generation of evidence. A welfare-maximizing designer can delay the disclosure of previously generated information in order to speed up adoption. The optimal policy transparently discloses bad news and delays good news. This finding resonates with regulation demanding that fatal breakdowns be reported promptly. The designer’s intervention makes all agents better off.
Date: 14 June 2024, 14:15 (Friday, 8th week, Trinity 2024)
Venue: Manor Road Building, Manor Road OX1 3UQ
Venue Details: Seminar Room G or https://zoom.us/j/93867615769?pwd=T1NsTEVwNE40R3pEVW9yTlBicG1mdz09
Speaker: Jan Knoepfle (Queen Mary University of London)
Organising department: Department of Economics
Part of: Nuffield Economic Theory Seminar
Booking required?: Not required
Audience: Members of the University only
Editor: Edward Clark