Quotation Kartal, Melis, Tremewan, James. 2018. An offer you can refuse: the effect of transparency with endogenous conflict of interest. Journal of Public Economics. 161 (May), 44-55.


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Abstract

We study the effects of transparency on information transmission and decision making theoretically and experimentally. We develop a model in which a decision maker seeks advice from a better-informed adviser whose advice might be swayed by financial incentives. Transparency enables the decision maker to learn whether or not the adviser accepted such an incentive, for example from an “interested” third party. Prior theoretical and experimental research mostly found that transparency is ineffective or harmful to decision makers. Our model predicts that transparency is never harmful and, depending on equilibrium selection, may improve the accuracy of decision makers. In our experiment transparency does indeed improve accuracy, especially if it is mandatory.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Journal of Public Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, INF-A, MAN-A, STRAT-A, VW-A, WH-A
Language English
Title An offer you can refuse: the effect of transparency with endogenous conflict of interest
Volume 161
Number May
Year 2018
Page from 44
Page to 55
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S0047272718300586
DOI https://doi.org/10.1016/j.jpubeco.2018.04.003
Open Access N

Associations

People
Kartal, Melis (Details)
External
Tremewan, James (WU WIen, New Zealand)
Organization
Institute for Public Sector Economics IN (Details)
Department of Economics DP (Details)
Research areas (ÖSTAT Classification 'Statistik Austria')
5325 Political economics (Details)
5351 Public economy (Details)
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