The Indirect Cost of Information

Weijie Zhong

Papers from arXiv.org

Abstract: We study the indirect cost of information from sequential information cost minimization. A key sub-additivity condition, together with monotonicity equivalently characterizes the class of indirect cost functions generated from any direct information cost. Adding an extra (uniform) posterior separability condition equivalently characterizes the indirect cost generated from any direct cost favoring incremental evidences. We also provide the necessary and sufficient condition when prior independent direct cost generates posterior separable indirect cost.

Date: 2018-09, Revised 2020-04
New Economics Papers: this item is included in nep-dge
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