I am a fifth-year PhD candidate at Caltech working on experiments to test theories of decision-making. My goal is to use individual-level measurement to design better-targeted policies.
Personalized interventions use information previously elicited from a consumer to tailor the prices, policies or opportunities the consumer later faces. The possibility of personalization alters the consumer’s incentive to provide their information accurately in the first place, and can therefore compromise the incentive compatibility of its elicitation. This paper studies how personalization affects the information consumers provide, in an experiment with direct access to the consumer’s information. Participants misreport in anticipation of future use, which compromises incentive compatibility, but the misreporting is far from optimal and highly heterogeneous. A substantial minority reports as if no future use existed. For them the elicitation remains behaviorally incentive compatible, even where it is not incentive compatible in theory.