Template-Type: ReDIF-Paper 1.0
Title: Hidden Testing and Selective Disclosure of Evidence
Author-Name: Claudia Herresthal
Author-Email: claudia.herresthal@unibonn.de



Classification-JEL: D83, D82
Keywords: endogenous information acquisition, verifiable disclosure, transparency, questionable research practices

Abstract: A decision maker faces an approval choice under uncertainty. An agent can gather information through sequential testing. Players agree on the optimal choice under certainty, but the decision maker has a higher approval standard than the agent. We compare the case where testing is hidden and the agent can choose whether to disclose his findings to the case where testing is observable. The agent can exploit the additional discretion under hidden testing to his advantage if and only if the decision maker is sufficiently inclined to approve. Hidden testing then yields a Pareto improvement over observable testing if the conflict between players is larger than some threshold, but leaves the decision maker worse off and the agent better off if the conflict is smaller than this threshold.

Note: 
Length: 32
Creation-Date: 2021-06
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp145
Handle: RePEc:bon:boncrc:CRCTR224_2020_145v2