Hans-Theo Normann

Abstract:

We study the voluntary revelation of private information in laboratory experiments. Players can reveal their private information at a cost. While rational revelation improves a player's payoff, it imposes a negative externality on others. In a first study, we find that players reveal less often than predicted, consistent with the level-k model. In a second modified design, complete revelation may occur even for low levels of cognitive reasoning, and we observe more revelation in the data. Likewise, when players earn their position in a pre-play contest and when they act under strategic uncertainty, more complete unravelling of information results.