Abraham Wickelgren, The University of Texas at Austin

How does private information affect collective action when a single action is sufficient to avert social harm but individuals fear being the only one to sound a false alarm? Each of nplayers receive a private binary signal about the state of the world (safe or dangerous) and must independently decide whether to act (sound the alarm, blow the whistle, or call the police). If the true state is dangerous, any player sounding the alarm averts harm. But, if the true state is safe, a player suffers a cost if they alone sound the alarm. Because an individual’s action is payoff-relevant only if all others refrain from acting, players rationally discount the value of a danger signal. This effect intensifies for more precise signals if and only if the expected cost of type II error is large relative to the expected cost of type I error or when the number of players increases. By showing that higher-quality information can paradoxically reduce incentives to act, this paper provides a unified explanation for otherwise puzzling collective inaction in emergency response (the murder of Kitty Genovese), organizational reporting (whistle-blowing), and alarm systems (Pearl Harbor).