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Information about the consequences of our consumption choices can be unwelcome, and people sometimes avoid it. We investigate a situation where one person possesses information that is inconvenient for another, and study why and when they decide to transmit that information. We introduce a simple and portable experimental game to analyze transmission of inconvenient information. In this game, a Sender can inform a Receiver at a small cost about a negative externality associated with a tempting and profitable action for the Receiver. The results from our online experiment (N = 1,512) show that Senders transmit more information for large negative externalities. Sender's decisions are largely driven by their own preferences for information. However, some Senders take the Receiver's feelings into account, by transmitting evidence of positive externalities or by suppressing negative information upon the Receiver's request. Understanding the decision to share inconvenient information matters, as it will affect the personal and political will to address important externalities and can inform strategies to encourage the transmission of inconvenient information within organizations.

How do people trade off individual versus group welfare in the face of uncertainty regarding private benefits of different actions? We propose a partial information revelation ('recommendation') policy designed to maximize group welfare, and we show its theoretical robustness to well-documented behavioral deviations from the risk neutral, Bayesian, and self-interested benchmark. In a large-scale online experiment with 2600 subjects, we then show that this policy fails to improve upon a full information benchmark even when individual and group objectives are aligned, as the recommended course of action is not followed often enough. In a setting where individual and group interests clash, the recommendation is followed less often, largely by subjects who misunderstand the policy. This provides suggestive evidence in favor of simplicity in information design in multi-agent strategic settings.

Amidst the growing popularity of AI language models, we study the potential impacts of AI-facilitated communication on trust and trustworthiness. With a laboratory experiment, we compare traditional communication with communication assisted by ChatGPT in a between-subject design. We find that participants with access to Chat-GPT more frequently make promises, while their promise-keeping rate diminishes. Overall we do not observe effects on trust and trustworthiness rates. However, we show that in the GPT treatment participants coordinate less often on the trust outcome and that promises no longer serve as a reliable indicator of honesty.

Humans need social closeness to prosper. There is evidence that empathy can induce socialcloseness. However, it remains unclear how empathy-related social closeness is formed and howstable it is as time passes. Here we applied an acquisition-extinction paradigm, combined withcomputational modelling and fMRI, to investigate the formation and stability of empathy-relatedsocial closeness. Participants observed painful stimulation of another person with high probability(acquisition) and low probability (extinction), and rated their closeness to the other person. Theresults of two independent studies showed an increase in social closeness in the acquisition blockthat resisted extinction in the extinction block. Providing insights into the underlying mechanisms,reinforcement learning modelling revealed that participants formed social closeness based onobserving other’s pain, but maintained social closeness based on observing pain relief, i.e., lessfrequent pain stimulation in the extinction block. Model comparison revealed that this wasassociated with an individual recalibration of the observed feedback value allowing for an increase insocial closeness based on observing another’s pain as well as non-pain. The results of a control studyshowed that this feedback recalibration was specific for the learning of empathy-related socialcloseness. On the neural level, the recalibration of the feedback signal was associated with neuralresponses in anterior insula and adjacent inferior frontal gyrus and the bilateral superior temporalsulcus/temporo-parietal junction (TPJ). These results reveal that empathy-related social closenessgenerated in bad times, i.e., via empathy with the misfortune of another person, transfers to goodtimes, and thus may form one important basis for stable social relationships.

In economic environments, decision-makers may strategically delay irreversible investments to learn from the actions of others creating socially suboptimal outcomes. We investigate if and how communication mitigates the strategic delay in investment timings. Players choose when to invest in a nonrival project with uncertain returns. The earliest investor bears the costs of investment and all players learn whether the project is of good or bad quality. Informational externalities create free-riding incentives resulting in strategic delays in investment timings. Our theoretical analysis suggests that introducing communication into this setting reduces strategic delay. We implement our model in a laboratory experiment utilizing a 2x2 design, where we vary the availability of communication and the number of agents. We find that communication significantly reduces the strategic delay and leads to earlier investment timings in the two-player case. In the case of four players, communication helps subjects to coordinate and reduce strategic delay significantly in the first period of the experiment, while coordination failures emerge in the following periods sweeping away the beneficial effect of communication at the aggregate level.