2009, Strategic disclosure of research results: The cost of proving your honesty

In situations where a biased sender provides verifiable information to a receiver, I study how strategic reporting affects the incentives to search for information. Research provides series of signals that can be used selectively in reporting. I show that the sender is strictly worse off whenhis research effort is not observed by the receiver: he has to conduct more research than in the observable case and in equi-librium, discloses all the information he obtained. However this extra research can be socially bene-ficial and mandatory disclosure of results can thus be welfare reducing. Finally I identify cases where the sender withholds evidence and for which mandatory disclosure rules become more attractive. In 2002, editors of eleven of the most prestigious medical journals, announced that they would only publish the results of studies that were entered at their start in a publicly available database.1 Pharmaceutical firms conduct clinical trials to test the efficacy and potential side-effects of their drugs and to compare them to competitors products. Publishing results of studies is an efficient way to influence doctors prescriptions and patients tastes. However, firms can conductmultiple trials and select themost favourable results. The system of mandatory disclosure adopted by medical journals is a response to the fear of such selective publishing.2 It makes the research effort of pharmaceutica