Dynamic Evidence Disclosure: Delay the Good to Accelerate the Bad
Jan Knoepfle, Julia Salmi
TL;DR
This paper studies how delaying the disclosure of good news while promptly revealing bad news can accelerate technology adoption and improve overall welfare by mitigating free-riding behavior among agents.
Contribution
It introduces an optimal disclosure policy that delays good news to promote faster adoption, a novel approach to managing information flow in dynamic settings.
Findings
Delaying good news accelerates technology adoption.
Prompt disclosure of bad news improves welfare.
Optimal policy balances information timing for societal benefit.
Abstract
We analyze the dynamic tradeoff between generating and disclosing evidence. Agents are tempted to delay investing in a new technology in order to learn from information generated by the experiences of others. This informational free-riding is collectively harmful as it slows down learning and innovation adoption. 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.
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Taxonomy
TopicsInformation and Cyber Security · Cybercrime and Law Enforcement Studies · Data-Driven Disease Surveillance
MethodsSPEED: Separable Pyramidal Pooling EncodEr-Decoder for Real-Time Monocular Depth Estimation on Low-Resource Settings