Author(s)  
Christine L. Exley, Judd Kessler

In standard economic theory, information helps agents optimize. But providing agents with information about the benefits of an action often fails to encourage that action. This paper proposes a far-reaching behavioral explanation: information may make salient that the benefits of taking an action could be improved and agents may see the potential for improvement as a reason to avoid the action. In an experiment, making more salient how a donation could be improved significantly decreases giving. Self-serving motives dramatically magnify the effect, suggesting why information may be particularly ineffective at encouraging privately costly actions with social or future benefits.

JEL Codes  
D83: Search; Learning; Information and Knowledge; Communication; Belief
C91: Design of Experiments: Laboratory, Individual
D64: Altruism; Philanthropy
Keywords  
experiment
information acquisition
philanthropy