Working Paper: CEPR ID: DP7457
Authors: Isabelle Brocas; Juan D. Carrillo; Thomas R. Palfrey
Abstract: We consider a model where two adversaries can spend resources in acquiring public information about the unknown state of the world in order to influence the choice of a decision maker. We characterize the sampling strategies of the adversaries in the equilibrium of the game. We show that, as the cost of information acquisition for one adversary increases, that person collects less evidence whereas the other adversary collects more evidence. We then test the results in a controlled laboratory setting. The behavior of subjects is close to the theoretical predictions. Mistakes are relatively infrequent (15%). They occur in both directions, with more over-sampling (39%) than under-sampling (8%). The main difference with the theory is the smooth decline in sampling around the theoretical equilibrium. Comparative statics are also consistent with the theory, with adversaries sampling more when their own cost is low and when the other adversary's cost is high. Finally, there is little evidence of learning over the 40 matches of the experiment.
Keywords: Adversarial system; Experiment; Information acquisition; Search
JEL Codes: C91; D83
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Cost of information acquisition (D83) | Evidence collected by adversary (K41) |
| Cost of information acquisition (D83) | Evidence collected by other adversary (Y50) |
| Empirical behavior (C99) | Theoretical predictions (C59) |
| Mistakes in sampling behavior (C83) | Oversampling and undersampling (C83) |
| Cost of information acquisition (own) and Cost of information acquisition (other) (D89) | Sampling behavior (C99) |