Linnéa Marie Rohde’s research while affiliated with University of Mannheim and other places

Can strategic information acquisition harm the provision of a public good? We investigate this question in an incentivized online experiment with a large sample of the German population. The marginal returns of the public good are uncertain: it is either socially efficient to contribute or not. In the information treatment, participants can choose between two information sources with opposite biases. One source is more likely to report low marginal returns, whereas the other is more likely to report high marginal returns. We find that information avoidance is a minor phenomenon. Most participants select the source biased towards reporting low marginal returns, independent of their prior beliefs. As a result, the information treatment reduces contributions and increases free-riding. When contributing is socially efficient, the information treatment reduces social welfare. We find that social preferences guide information acquisition: socially-oriented participants are more likely to acquire information and select the source that is biased towards reporting low marginal returns. JEL Classification: C99, D12, D61, D83, H41