Public signals can backfire: Misinterpretation leads to social chaos.
The article explores how people interpret information when they don't know how it was gathered. It shows that when people are trying to coordinate their actions, they tend to interpret signals based on what they think others are doing. This can lead to misunderstandings and affect social welfare. The study suggests that if people correctly assess the accuracy of public information but believe others don't, it can be beneficial. It proposes that central banks can improve communication by making it more complex and technical.