Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2013:17: Strategic Self-Ignorance

Linda Thunström (), Jonas Nordström (), Jason F. Shogren (), Mariah Ehmke () and Klaas van 't Veld ()
Additional contact information
Linda Thunström: Department of Economics and Finance, University of Wyoming, Postal: Department of Economics and Finance, University of Wyoming, 1000 E. University Ave. , Laramie, WY 82071, USA
Jonas Nordström: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden
Jason F. Shogren: Department of Economics and Finance, University of Wyoming, Postal: Department of Economics and Finance, University of Wyoming, 1000 E. University Ave. , Laramie, WY 82071, USA
Mariah Ehmke: Department of Agricultural and Applied Economics, University of Wyoming, Postal: Department of Agricultural and Applied Economics, University of Wyoming, 1000 E. University Ave. , Laramie, WY 82071, USA
Klaas van 't Veld: Department of Economics and Finance, University of Wyoming, Postal: Department of Economics and Finance, University of Wyoming, 1000 E. University Ave. , Laramie, WY 82071, USA

Abstract: We examine strategic self-ignorance—the use of ignorance as an excuse to over-indulge in pleasurable activities that may be harmful to one’s future self. Our model shows that guilt aversion provides a behavioral rationale for present-biased agents to avoid information about negative future impacts of such activities. We then confront our model with data from an experiment using prepared, restaurant-style meals—a good that is transparent in immediate pleasure (taste) but non-transparent in future harm (calories). Our results support the notion that strategic self-ignorance matters: nearly three of five subjects (58 percent) chose to ignore free information on calorie content, leading at-risk subjects to consume significantly more calories. We also find evidence consistent with our model on the determinants of strategic self-ignorance.

Keywords: Experiment; Information; Ignorance

JEL-codes: D03; D81; D83

38 pages, May 28, 2013

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