Explanations

Thomas Graeber (), Christopher Roth and Constantin Schesch ()
Additional contact information
Thomas Graeber: Harvard Business
Constantin Schesch: Harvard Business School

No 291, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: When people exchange ideas, both truths and falsehoods can proliferate. We study the role of explanations for the spread of truths and falsehoods in 15 financial decision tasks. We pay participants to record the reasoning behind each of their answers, providing over 6,900 unique verbal explanations in total. A separate group of participants either only observe one orator’s choice or additionally listen to their explanation before making their own choice. Listening to explanations strongly improves aggregate accuracy. This effect is asymmetric: explanations enable the spread of truths, but do not curb the contagion of falsehoods. To study mechanisms, we extract every single argument provided in the explanations alongside a large collection of speech features, revealing the nature of financial reasoning on each topic. Explanations for truths exhibit a significantly richer message space and higher argument quality than explanations for falsehoods. These content differences in the supply of explanations for truths versus falsehoods account for 60% of their asymmetric benefit, whereas orator and receiver characteristics play a minor role.

Keywords: : Explanations; Social Learning; Speech Data; Financial Knowledge; Financial Reasoning (search for similar items in EconPapers)
Pages: 86
Date: 2024-04
New Economics Papers: this item is included in nep-exp and nep-mac
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https://www.econtribute.de/RePEc/ajk/ajkdps/ECONtribute_291_2024.pdf First version, 2024 (application/pdf)

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Working Paper: Explanations (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ajk:ajkdps:291

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