Strategic ignorance in purchasing decisions

In behavioral economics, the discrepancy between stated and actual behavior in this respect has not been addressed explicitly. However, Nyborg developed a model in 2011 that explains why it might be rational for consumers to avoid information when it bears the possibility to put a moral burden on them. According to her theory, agents care not only about monetary payoffs, but also about their self-image. Thus, staying ignorant about product characteristics gives consumers the possibility to maintain a positive self-image while at the same time minimizing their expenditures. So far, this model has not been tested empirically in real purchase decisions. The following experiment aims at filling this gap and studies whether strategic ignorance is used by consumers to justify selfish behavior. We will use quality differences in labels that indicate environmental or social standards of a product to analyze whether consumers prefer to stay ignorant if they are offered to receive costless information about the label.

The aim of this project is twofold. First, by testing the theory of strategic ignorance in real purchase decisions, we analyze whether the existing lab results are transferable to everyday decisions of consumers. Second, if evidence is found in favor of strategic ignorance, it can have important implications for environmental policy because it sheds light on the efficiency of information provision to consumers by using for example eco-labels and certifications. This is important as the choice of products with credible labels implies voluntary public good provision by contributing to more sustainable production processes. To sum up, we think the experiment laid out above contributes to the literature in two ways. First, it tests for strategic ignorance in decisions that we are confronted with in our daily lives. We can learn from the experiment whether the results are transferable to situations that imply voluntary public good provision. Second, the experiment has direct implications for environmental policy. The experiment tests whether consumers will use information that is given to them as an option or if they prefer to avoid it. If the latter is the case, it might question the effectiveness of additional product information for consumers that is, for example, provided by the scanning of bar codes on the packaging. Besides, it might be the case that consumers use the multitude of labels as an excuse not to base their purchase decisions on certificates at all. In such a case, it might be advisable for the policy maker to limit the admitted certificates to such labels that guarantee strictly enforced standards. 

Theme 1: Individual behaviour, cooperation and trust.

Project status
Project | 20 March 2015