PROJECT INFORMATION DISCLOSURE AND OPPORTUNISTIC BEHAVIOR

Abstract

This paper is concerned with decision making processes where a government provides individuals with information on a public project, observes the individuals' voices to evaluates the social welfare driven by the project, and decides whether or not to carry out the project. In this context, the government is faced with a trade-off with regard to the accuracy of project information she provides: the government is required to provide the individuals more precise information to gather more informed voices on the project, while providing project information in detail might cause the individual's opportunistic behavior. In this paper, a communication game is presented to examine how the individuals are induced to adopt the opportunistic behavior. Furthermore, alternative institutional designs are introduced to improve the information transmission capabilities between the government and individual around the project.