We study the life cycle of a firm that produces good unknown quality. The manages its quality by investing while consumers learn via public breakthroughs; if fails to generate such breakthroughs, revenue falls and it eventually exits. Optimal investment depends on firm’s reputation (the market’s belief about quality) self-esteem own quality), is single-peaked in time since breakthrough. derive ...

We develop a dynamic model of political competition between two groups that differ in their subjective the data generating process for common outcome. One group has simpler than other as they ignore some relevant policy variables. show cycles must arise and simple world views—which can be interpreted populist views—imply extreme choices. Periods which those with more complex govern increase spe...

Mistakes and overconfidence in detecting lies could help spread. Participants our experiments observe videos which senders either tell the truth or lie, are incentivized to distinguish between them. We find that participants fail detect lies, but overconfident about their ability do so. use these findings study determinants of sharing its effect on lie detection, finding even when share truthfu...

Commentators often lament forecasters’ inability to provide precise predictions of the long-run behavior complex economic and physical systems. Yet their concerns conflate presence substantial uncertainty with need for predictability; short-run can partially substitute if decision-makers adjust activities over time. So what is relative importance short- predictability? We study this question in...

An information designer wishes to persuade agents invest in a project of unknown quality. To do so, she must induce investment and collect feedback from these investments. Motivated by data regulations simplicity concerns, our faces communication constraints. These constraints hinder her without benefiting the agents: they impose an upper bound on induced belief spread, limiting persuasion. Nev...

Can information and communication technologies help citizens monitor their elections? We analyze a large-scale field experiment designed to answer this question in Colombia. leveraged Facebook advertisements sent over 4 million potential voters encourage citizen reporting of electoral irregularities. also cross-randomized whether candidates were informed about the campaign subset municipalities...

Given a scarcity of journal space, what is the optimal rule for whether an empirical finding should be published? Suppose publications inform public about policy-relevant state. Then journals publish extreme results, meaning ones that move beliefs sufficiently. This may take form one- or two-sided test comparing point estimate to prior mean, with critical values determined by cost-benefit analy...

ABSTRACT We study the impact of asymmetric (i.e., conservative or aggressive) disclosure on a firm’s price in classic setting which its stock is traded by risk-averse investors and noise liquidity traders. show that accounting policies alter relative risk faced when they short versus long, causes market to differ for positive negative demand shocks. As result, conservatism raises firms’ valuati...

Abstract This article compares the classic liability rules, negligence, and strict liability, under hypothesis that injurers victims formulate subjective beliefs about probabilities of harm. Parties may reasonably disagree in their assessment precautionary measures available: a measure regarded as safe by one party be not other. By relying on notions Pareto efficiency “No Betting” efficiency, s...

We experimentally study decentralized organizational learning. Our objective is to understand how learning members of an organization cope with the confounding effects of the simultaneous learning of others. We test the predictions of a stylized, rational agent model of organizational learning that provides sharp predictions as to how learning members of an organization might cope with the simu...