Blind Disclosure
American Economic Journal: Microeconomics
vol. 15,
no. 2, May 2023
(pp. 41-79)
Abstract
We develop and test a theory of blind disclosure. A sender chooses whether to disclose information based on a preliminary, private signal. In the unique equilibrium, contrary to the literature's canonical unraveling result, senders disclose only if their preliminary signal exceeds a cutoff. This cutoff rule leads to partial unraveling in environments with either risk aversion or moral hazard, and disclosure decreases with uncertainty. Using unique administrative data on disclosed and undisclosed grades in a large university, we find that the model is consistent with student choices during spring 2020 to conceal letter grades by switching to optional pass-fail grades.Citation
Kolb, Aaron, Marilyn Pease, Daniel W. Sacks, and Joshua Quick. 2023. "Blind Disclosure." American Economic Journal: Microeconomics, 15 (2): 41-79. DOI: 10.1257/mic.20210182Additional Materials
JEL Classification
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D82 Asymmetric and Private Information; Mechanism Design
- I23 Higher Education; Research Institutions
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