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Does Free Information Provision Crowd Out Costly Information Acquisition? It’S A Matter Of Timing, Diego Aycinena, Alexander Elbittar, Andrei Gomberg, Lucas Rentschler
Does Free Information Provision Crowd Out Costly Information Acquisition? It’S A Matter Of Timing, Diego Aycinena, Alexander Elbittar, Andrei Gomberg, Lucas Rentschler
ESI Working Papers
We consider the issue of how timing of provision of additional information affects information-acquisition incentives. In environments with costly attention, a sufficiently confident agent may choose to act based on the prior, without incurring those costs. However, a promise of additional information in the future may be used to encourage additional attentional effort. This may be viewed as a novel empirical implication of rational inattention. In a lab experiment designed to test this theoretical prediction, we show that promise of future “free” information induces subjects to acquire information which they would not be acquiring without such a promise.
Public Leaderboard Feedback In Sampling Competition: An Experimental Investigation, Stanton Hudja, Brian Roberson, Yaroslav Rosokha
Public Leaderboard Feedback In Sampling Competition: An Experimental Investigation, Stanton Hudja, Brian Roberson, Yaroslav Rosokha
ESI Working Papers
We investigate the role of performance feedback, in the form of a public leaderboard, in a sequential-sampling contest with costly observations. The player whose sequential random sample contains the observation with the highest value wins the contest and obtains a prize with a fixed value. We find that there exist parameter configurations such that in the subgame perfect equilibrium of contests with a fixed ending date (i.e., finite horizon), providing public performance feedback results in fewer expected observations and a lower expected value of the winning observation. We conduct a controlled laboratory experiment to test the theoretical predictions, and find …
Working Too Much For Too Little: Stochastic Rewards Cause Work Addiction, Brice Corgnet, Simon Gaechter, Roberto Hernán González
Working Too Much For Too Little: Stochastic Rewards Cause Work Addiction, Brice Corgnet, Simon Gaechter, Roberto Hernán González
ESI Working Papers
People are generally assumed to shy away from activities generating stochastic rewards, thus re-quiring extra compensation for handling any additional risk. In contrast with this view, neurosci-ence research with animals has shown that stochastic rewards may act as a powerful motivator. Applying these ideas to the study of work addiction in humans, and using a new experimental paradigm, we demonstrate how stochastic rewards may lead people to continue working on a re-petitive and effortful task even after monetary compensation becomes saliently negligible. In line with our hypotheses, we show that persistence on the work task is especially pronounced when the …