Brown Bag Seminar: "Selective Exposure Reduces Voluntary Contributions: Experimental Evidence from the German Internet Panel"

Can strategic information acquisition harm the provision of a public good? We investigate this question in an incentivized online experiment with a large and heterogeneous sample of the German population. The marginal returns of the public good are uncertain: it is either socially efficient to contribute or not.  In the information treatment, participants can choose between two information sources with opposite biases. One source is more likely to report low marginal returns, whereas the other is more likely to report high marginal returns. Most participants select the source biased towards low marginal returns, independent of their prior beliefs. As a result, the information treatment significantly reduces contributions and increases free-riding. When contributing is socially efficient, the information treatment reduces social welfare by up to 5.3%. Moreover, social preferences affect information acquisition: socially-oriented participants are more likely to acquire information and to select the source that is biased towards low marginal returns. We corroborate our findings by showing that participants' behavior in our experiment is consistent with their attitudes towards actual public goods.