Séminaire KTO-GREDEG-OFCE - Joël van der Weele (University of Amsterdam)

"Communicating Externalities when Image Concerns Matter"
Quand ? Le 31-05-2018,
de 15:30 à 17:00
Où ? GREDEG - Salle Picasso
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Title : Communicating Externalities when Image Concerns Matter


We investigate communication about externalities when communicators are concerned about their image as a prosocial actor. We show theoretically that communicators face a strategic trade-off: Exaggerating social impact increases others’ motivations to act prosocially but increases pressure on the communicator to engage in personally costly action. Equilibrium communication will therefore feature “denial” by people who are unmotivated to act prosocially. We then test the theory in the context of charitable giving. In our experiment, a “sender” receives an informative but noisy signal about the return to a charitable donation. She then communicates with a “receiver”, upon which both subjects can donate. In line with a justification motive, participants are less likely to communicate a high impact of the donation when their donations are visible to others, thereby reducing giving among receivers. This shows that communication about externalities is intimately tied up with the management of public image or reputation, and helps understand the fraught nature of political discussions about many public goods.