Paging Inspector Sands: The Costs of Public Information
- (pp. 92-113)
Abstract
We exploit the introduction of pedestrian countdown signals—timers that indicate when traffic lights will change—to evaluate a policy that improves the information of all market participants. We find that although countdown signals reduce the number of pedestrians struck by automobiles, they increase the number of collisions between automobiles. They also cause more collisions overall, implying that welfare gains can be attained by hiding the information from drivers. Whereas most empirical studies on the role of information in markets suggest that asymmetric information reduces welfare, we conclude that asymmetric information can, in fact, improve it.Citation
Kapoor, Sacha, and Arvind Magesan. 2014. "Paging Inspector Sands: The Costs of Public Information." American Economic Journal: Economic Policy, 6 (1): 92-113. DOI: 10.1257/pol.6.1.92Additional Materials
JEL Classification
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief
- R41 Transportation: Demand, Supply, and Congestion; Safety and Accidents; Transportation Noise
There are no comments for this article.
Login to Comment