Ego-utility and Endogenous Information Acquisition; An Experimental Study
CERGE-EI Working Papers from The Center for Economic Research and Graduate Education - Economics Institute, Prague
This paper examines endogenous decisions to acquire useful information. My experimental design tries to test predictions of ego-utility theories and other relevant theories about the decision-making process of agents in the environment with costless signals. Only slightly more than half of the subjects acquired an optimal number of the signals for payoff maximization. The results suggest that for the subjects making sub-optimal decisions, aversion to cognitive dissonance is the prevalent channel. Contrary to this, I find much less support for the ego-utility theory and theory of information ignorance in my setting. The availability of information alone does not automatically lead to an improvement in decisions.
Keywords: information acquisition; experiment; overconfidence (search for similar items in EconPapers)
JEL-codes: C91 D03 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe, nep-exp, nep-neu and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:cer:papers:wp582
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