The Policy Consequences of Information: Three Essays on Being (Un)Informed

Information in economics is viewed as desirable to the extent that it leads to better decisions. Growing evidence,however,finds that people are often motivated to avoid instrumentally useful information–and sometimes are better off for doing so. I develop and validate a scale and show that the desire to obtain and avoid information is domain-specific, stable over time, and predicts consequential behavior. One consequence of such a desire to avoid information is that some behavioral interventions, e.g. energy reports comparing one’s own use to that of neighbors, may have a hedonic cost that is not accounted for (Chapter 1). Providing information can also have a more direct policy cost. When tackling challenging societal problems like climate change, we may be motivated to provide information to citizens and policymakers about all available options. However, painless nudges, intended to be complementary policies, can come to be viewed as solutions on their own. They can then crowd-out support for more effective policies, ultimately undermining the policy objective (Chapter 2). Finally, behavioral interventions have been subject to the criticism that they are manipulative and would be ineffective if transparently disclosed. I show that, contrary to this fear, telling people that they were randomly assigned to a default option does not diminish the effectiveness of the nudge (Chapter 3).