Template-Type: ReDIF-Paper 1.0
Author-Name: Ying Xue Li
Author-Name-First: Ying Xue
Author-Name-Last: Li
Author-Name: Burkhard Schipper
Author-Name-First: Burkhard
Author-Name-Last: Schipper
Author-Workplace-Name: Department of Economics, University of California Davis
Title: Disclosure under Unawareness: An Experiment
Abstract: We consider a disclosure game between a seller and a buyer. The seller knows the quality of a good, while the buyer does not. Before the buyer decides how many units to purchase, the seller can disclose verifiable information about the good. The better the information, the more the buyer is inclined to buy. The information about the good is two-dimensional. We design two experimental treatments: In the unawareness treatment, the buyer is uncertain about the first dimension, but unaware of the second. Here, unawareness refers to a lack of conception rather than lack of information. In the control treatment, the buyer is aware of both dimensions, but uncertain about them. The theory predicts unraveling of information in the control treatment but not in the unawareness treatment. Our experimental findings are consistent with this prediction. However, a closer examination reveals that this outcome is driven by buyers becoming confused when sellers naively raise awareness of the second dimension.
Length: 21
File-URL: https://repec.dss.ucdavis.edu/files/lrqc3pf2oap9cbnz7knlipa22ud4/unawpgexp20250329.pdf
File-Format: application/pdf
Number: 370
Classification-JEL: D83, C72, C92
KeyWords: disclosure of information, disclosure games, verifiable information, unawareness, unknown unknowns, unraveling, rationalizability, experimental games
Creation-Date: 20250331
Handle: RePEc:cda:wpaper:370