Contributors:
1. Manuel Foerster

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: DOI | ARK

Category: Project

Description: We investigate strategic communication about the size of externalities. In our model, a sender'' with noisy information about the social impact of a costly action sends a cheap-talk message to a receiver'', upon which both agents choose whether to act. In the presence of social preferences and image concerns, the sender trades off "persuasion", exaggerating impact to induce receiver action, and "justification", downplaying impact to cast doubt on the effectiveness of action and excuse her own passivity. In an experiment on charitable giving we find evidence for both motives. In line with our theory and a justification motive, increasing image concerns reduces communication of positive impact. Our results help explain why debates on morally charged topics may lead to persistent disagreement about even objective facts.