Recent behavioral models argue in favor of avoidance of instrumental information. We explore the role of information avoidance in a real-eﬀort setting. Our experiment oﬀers three main results. First, we conﬁrm that preferences for avoidance of instrumental information exist, studying information structures on performance pay. Second, information avoiders outperform information receivers. This result holds independently of eﬀects of self-selection. Third, the ﬁndings support theories on information avoidance that favor an optimistic belief design rather than theories that rationalize such behavior as a way to mitigate self-control problems. This suggests that coarse information structures lead agents to distort their beliefs away from the objective prior.
More Eﬀort with Less Pay: On Information Avoidance, Optimistic Beliefs, and Performance
Steffen Huck, Nora Szech and Lukas Wenner
|Date:||November 15, 2017|