Costly Subjective Learning

Youichiro Higashi (), Kazuya Hyogo () and Norio Takeoka ()
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Youichiro Higashi: Faculty of Economics, Okayama University
Kazuya Hyogo: Faculty of Economics, Ryukoku University
Norio Takeoka: Department of Economics, Hitotsubashi University

No 1040, KIER Working Papers from Kyoto University, Institute of Economic Research

Abstract: Information acquisition is an important aspect of decision making. Acquiring information is costly, but the cost of information acquisition is not typically observable and hence it is not obvious how it can be measured. Using preference over menus, de Oliveira, Denti, Mihm, and Ozbek [15] provide an axiomatic foundation for the additive costs model of information acquisition. If obtaining signals from experiments is time-consuming, such as in the case of a long-run investment decision, however, costs may be measured as a discount factor or waiting time for acquiring information. We propose a general class of representations which allows for non-additive costs for information acquisition and provide its axiomatic foundation. Furthermore, the discounting costs model is characterized as a special case.

Keywords: costly information acquisition; rational inattention; waiting costs; preference for flexibility; preference over menus. (search for similar items in EconPapers)
JEL-codes: D11 D81 D91 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2020-08
New Economics Papers: this item is included in nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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