The Wisdom of the Crowd When Acquiring Information Is Costly

• 成果类型: Article
• 署名作者: Glazer, Jacob; Kremer, Ilan; Perry, Motty
• 署名单位: University of Warwick; Tel Aviv University; Hebrew University of Jerusalem; Hebrew University of Jerusalem
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2020.3792
• 发表日期: 2021
• 页码: 6443-6456
• 关键词: information processing; analytic modeling

摘要

We consider a sequential investment process that is characteristic of crowd-funding platforms, among other contexts. Investors wish to avoid the cost of information acquisition and thus prefer to rely on information acquired by previous investors. This may lead to a phenomenon similar to an information cascade. We characterize the optimal policy that balances between the incentive to acquire information and the optimal investment decision. The policy is based on time-varying transparency levels such that it may be worthwhile to conceal some information in some periods.