Related papers: Rational Aversion to Information
We consider a dynamic moral hazard problem between a principal and an agent, where the sole instrument the principal has to incentivize the agent is the disclosure of information. The principal aims at maximizing the (discounted) number of…
Does the asymptotic variance of the maximum composite likelihood estimator of a parameter of interest always decrease when the nuisance parameters are known? Will a composite likelihood necessarily become more efficient by incorporating…
I study the optimal provision of information in a long-term relationship between a sender and a receiver. The sender observes a persistent, evolving state and commits to send signals over time to the receiver, who sequentially chooses…
We consider an information updating system where an information provider and an information receiver engage in an update process over time. Different from the existing literature where updates are countable (hard) and take effect either…
We study the informational efficiency of a market with a single traded asset. The price initially differs from the fundamental value, about which the agents have noisy private information (which is, on average, correct). A fraction of…
The recent trend for acquiring big data assumes that possessing quantitatively more and qualitatively finer data necessarily provides an advantage that may be critical in competitive situations. Using a model complex adaptive system where…
Firms strategically disclose product information in order to attract consumers, but recipients often find it costly to process all of it, especially when products have complex features. We study a model of competitive information disclosure…
Decisions in organizations are about evaluating alternatives and choosing the one that would best serve organizational goals. To the extent that the evaluation of alternatives could be formulated as a predictive task with appropriate…
Many problems can be solved in two ways: either by adapting an existing solution, or by exchanging it for a new one. To investigate under what conditions people consider new solutions, we traced their information acquisition processes in a…
We study what changes to an agent's decision problem increase her value for information. We prove that information becomes more valuable if and only if the agent's reduced-form payoff in her belief becomes more convex. When the…
We study a sender-receiver model in which the receiver can commit to a decision rule before the sender determines the information policy. The decision rule can depend on the information structure chosen by the sender and the realized…
Before the massive spread of computer technology, information was far from complex. The development of technology shifted the paradigm: from individuals who faced scarce and costly information to individuals who face massive amounts of…
We consider information networks whereby multiple biased-information-providers (BIPs), e.g., media outlets/social network users/sensors, share reports of events with rational-information-consumers (RICs). Making the reasonable abstraction…
Motivated reasoning posits that people distort how they process information in the direction of beliefs they find attractive. This paper creates a novel experimental design to identify motivated reasoning from Bayesian updating when people…
A decision-maker periodically acquires information about a changing state, controlling both the timing and content of updates. I characterize optimal policies using a decomposition of the dynamic problem into optimal stopping and static…
Despite the obvious advantage of simple life forms capable of fast replication, different levels of cognitive complexity have been achieved by living systems in terms of their potential to cope with environmental uncertainty. Against the…
Vocabulary learning by children can be characterized by many biases. When encountering a new word, children as well as adults, are biased towards assuming that it means something totally different from the words that they already know. To…
Interacting agents receive public information at no cost and flexibly acquire private information at a cost proportional to entropy reduction. When a policymaker provides more public information, agents acquire less private information,…
Many fairness criteria constrain the policy or choice of predictors, which can have unwanted consequences, in particular, when optimizing the policy under such constraints. Here, we advocate to instead focus on the utility function the…
Integrating information gained by observing others via Social Bayesian Learning can be beneficial for an agent's performance, but can also enable population wide information cascades that perpetuate false beliefs through the agent…