Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/327129 
Year of Publication: 
2025
Series/Report no.: 
DICE Discussion Paper No. 429
Publisher: 
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), Düsseldorf
Abstract: 
Information unraveling is an elegant theoretical argument suggesting that private information is voluntarily and fully revealed in many circumstances. However, the experimental literature has documented many cases of incomplete unraveling and has suggested limited depth of reasoning on the part of senders as a behavioral explanation. To test this explanation, we modify the design of existing unraveling games along two dimensions. In contrast to the baseline setting with simultaneous moves, we introduce a variant where decision-making is essentially sequential. Second, we vary the cost of disclosure, resulting in a 2×2 treatment design. Both sequential decision-making and low disclosure costs are suitable for reducing the demands on subjects' level-k reasoning. The data confirm that sequential decision-making and low disclosure costs lead to more disclosure, and there is virtually full disclosure in the treatment that combines both. A calibrated level-k model makes quantitative predictions, including precise treatment level and player-specific revelation rates, and these predictions organize the data well. The timing of decisions provides further insights into the treatment-specific unraveling process.
Subjects: 
information revelation
level-k reasoning
sequential decisions
calibration
JEL: 
C72
C90
C91
ISBN: 
978-3-86304-428-2
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.