Costly information acquisition and the temporal resolution of uncertainty

Daniele Pennesi ()

Journal of Mathematical Economics, 2015, vol. 60, issue C, 115-122

Abstract: This paper studies the choice of an individual who acquires information before choosing an action from a set of actions, whose consequences depend on the realization of a state of nature. Information processing can be costly, for example, due to limited attention. We show that the preference of the individual is completely characterized by a preference for early resolution of uncertainty, which becomes indifference when facing degenerate choices. When information acquisition is no longer part of the decision process, the individual is indifferent to the timing of resolution of uncertainty and she behaves according to the subjective learning model of Dillenberger et al. (2014).

Keywords: Costly information acquisition; Menu choice; Rational inattention; Timing of resolution of uncertainty (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (4)

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Working Paper: Costly information acquisition and the temporal resolution of uncertainty (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:60:y:2015:i:c:p:115-122

DOI: 10.1016/j.jmateco.2015.07.005

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