This paper considers an economy where players have heterogeneous beliefs about the uncertain consequences of their collective actions. The roles of beliefs and preferences are examined, followed by a detailed investigation of the impacts of information in the presence of belief heterogeneity and ambiguity. In particular, we show that new information can worsen the free-riding problem, even when it better reflects the correct risk than the players' beliefs. When beliefs are highly heterogeneous, adding information noise can be Pareto-improving, for which the degree of risk and ambiguity aversion play asymmetric roles.


  • 2015-06: Presented at Keio University
  • 2014-09: Presented at Aoyama Gakuin University
  • 2014-07: Presented at Seattle
  • 2014-07: Presented at Istanbul
  • 2014-06: Presented at SURED
  • 2014-05: Presented at Waseda University
  • 2014-05: Updated