Preferences for Observable Information in a Strategic Setting: An Experiment

GATE Working Paper 1936, December 2019

42 Pages Posted: 23 Dec 2019

See all articles by Adam Zylbersztejn

Adam Zylbersztejn

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE)

Zakaria Babutsidze

SKEMA Business School

Nobuyuki Hanaki

Osaka University - Institute of Social and Economic Research

Date Written: December 19, 2019

Abstract

We experimentally investigate how much value people put in observable information about others in strategic interactions. The incentivized experimental task is to predict an unknown target player's trustworthiness in an earlier hidden action game. In Experiment 1, we vary the source of information about the target player (neutral picture, neutral video, video containing strategic content). The observed prediction accuracy rates then serve as an empirical measure of the objective value of information. In Experiment 2, we elicit the subjective value of information using the standard stated preferences method ("willingness to accept"). While the elicited subjective values are ranked in the same manner as the objective ones, subjects attach value to information which does not help predict target behavior, and exaggerate the value of helpful information.

Keywords: prediction, observable information, individual characteristics, stated preferences, willingness to accept, experiment

JEL Classification: C72, D83

Suggested Citation

Zylbersztejn, Adam and Babutsidze, Zakaria and Hanaki, Nobuyuki, Preferences for Observable Information in a Strategic Setting: An Experiment (December 19, 2019). GATE Working Paper 1936, December 2019 , Available at SSRN: https://ssrn.com/abstract=3506838 or http://dx.doi.org/10.2139/ssrn.3506838

Adam Zylbersztejn (Contact Author)

University of Lyon 2 - Groupe d'Analyse et de Théorie Economique (GATE) ( email )

93, chemin des Mouilles
Ecully, 69130
France

Zakaria Babutsidze

SKEMA Business School ( email )

Lille
France

Nobuyuki Hanaki

Osaka University - Institute of Social and Economic Research ( email )

6-1, Mihogaoka
Suita, Osaka 567-0047
Japan

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