The ability to buy small amounts of prepaid calling time had enabled the very poor in many countries to gain access to mobile phones. In Latin America, however, high taxes on communication services impedes some of that access, with a typical broadband plan costing 66% more than in the average developed country. In Asia, meanwhile, a low-cost business model has driven high mobile use.
Across the developing world, potential emergencies consistently rank high on surveys as the main reason for buying a phone. Many developing countries lack the standard emergency services found in developed countries. In the absence of such a service, people call a family member or a friend for help in a crisis.
For businesses, saving time and money on transportation has emerged as the greatest economic benefit of mobile phone ownership. Meanwhile, “mobile money” has gained in popularity, suiting the needs of the poor better than conventional banking.
Although citizens are often exposed to conflicting communications from political elites, few studies examine the effects of conflicting information on the quality of citizens’ decisions. Thus, I conduct experiments in which subjects are exposed to conflicting information before making decisions that affect their future welfare. The results suggest that a version of Gresham’s Law operates in the context of political communication. When a credible source of information suggests the welfare-improving choice and a less credible source simultaneously suggests a choice that will make subjects worse off, subjects make worse decisions than when only the credible source is available. This occurs because many subjects base their decisions upon the less credible source or forgo participation. This occurs mostly among unsophisticated subjects, who are more easily led astray. These findings reveal important limits to the effectiveness of credible information sources and suggest how political campaigns might strategically use conflicting information to their benefit.