Too much information? An experiment on communication and cooperation

•Individuals face uncertainty about returns to contributing to public goods.•What is the best way to communicate such information?•Coarse information is theoretically preferred, but this depends on how people react.•In a lab experiment, coarse information is sometimes worse.•Information providers adjust accordingly.

There are many situations where an informed third-party agent communicates information about the value of a public good or group project to contributors. One example is the information provided by charity ratings organizations. I ask how information about the quality of a public good should be communicated in order to minimize free-riding. I propose that coarse or pooled messages about the quality of the public good can increase contributions and, in turn, social welfare. If individuals cannot distinguish between a public good that they would like to contribute to and a public good that would otherwise suffer from a high degree of free-riding, contributions to the latter may approach the efficient level of provision. Experimental results suggest that, in practice, some participants are averse to giving without having complete information and - as a result - coarse messages may decrease welfare.