The acquisition of information in a dynamic market (*)
Jonathan B. Berk
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Jonathan B. Berk: School of Business Administration, University of Washington, Box 353200, Seattle, WA 981953200, USA
Economic Theory, 1997, vol. 9, issue 3, 451 pages
Abstract:
This paper models the information acquisition process in an intertemporal rational expectations framework. It demonstrates that equilibria do not generally exist in intertemporal economies in which agents are assumed to know the state-contingent price path and the information acquisition process is endogenous. In addition, an example of a fully revealing equilibrium in which agents pay a strictly positive amount for information is provided. Finally, we also show that it is possible for an equilibrium to exist in which agents choose to purchase information even if all agents, including the agents who purchased the information, are made strictly worse off by the purchase.
Date: 1997
Note: Received: December 9, 1994 revised version December 1, 1995
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Persistent link: https://EconPapers.repec.org/RePEc:spr:joecth:v:9:y:1997:i:3:p:441-451
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