The Appeal of Information Transactions

Antonio Cabrales, Olivier Gossner and Roberto Serrano

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: An information transaction entails the purchase of information. Formally, it consists of an information structure together with a price. We develop an index of the appeal of information transactions, which is derived as a dual to the agent’s preferences for information. The index of information transactions has a simple analytic characterization in terms of the relative entropy from priors to posteriors, and it also connects naturally with a recent index of riskiness.

Keywords: Informativeness; Information; transactions; Kullback-Leibler; divergence; Relative; entropy; Decision; under; uncertainty; Investment; Blackwell; ordering (search for similar items in EconPapers)
JEL-codes: C00 C43 D00 D80 D81 G00 G11 (search for similar items in EconPapers)
Date: 2012-09
New Economics Papers: this item is included in nep-ict and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Working Paper: The Appeal of Information Transactions (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:we1224

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