When Less is More: Experimental Evidence on Information Delivery During India’s Demonetization

Abhijit Banerjee, MIT, Emily Breza, Harvard University, Arun Chandrasekhar, Stanford University, and Benjamin Golub, Northwestern University

In disseminating information, policymakers face a choice between broadcasting to everyone and informing a small number of “seeds” who then spread the message. While broadcasting maximizes the initial reach of messages, we offer theoretical and experimental evidence that it need not be the best strategy. In a field experiment during the 2016 Indian demonetization, we delivered policy information, varying three dimensions of the delivery method at the village level: initial reach (broadcasting versus seeding); whether or not we induced common knowledge of who was initially informed; and number of facts delivered. We measured three outcomes: the volume of conversations about demonetization, knowledge of demonetization rules, and choice quality in a strongly incentivized policy-dependent decision. On all three outcomes, under common knowledge, seeding dominates broadcasting; moreover, adding common knowledge makes seeding more effective but broadcasting less so. We interpret our results via a model of image concerns deterring engagement in social learning, and support this interpretation with evidence on differential behavior across ability categories.