Information Aversion

Marianne Andries and Valentin Haddad
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Valentin Haddad: UCLA - University of California [Los Angeles] - UC - University of California

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Abstract: Information aversion, a preference-based fear of news flows, has rich implications for decisions involving information and risk-taking. It can explain key empirical patterns on how households pay attention to savings, namely that investors observe their portfolios infrequently, particularly when stock prices are low or volatile. Receiving state-dependent alerts following sharp market downturns such as during the financial crisis of 2008 improves welfare. Information averse investors display an ostrich behavior: overhearing negative news prompts more inattention. Their fear of frequent news encourages them to hold undiversified portfolios.

Date: 2020
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Citations: View citations in EconPapers (8)

Published in Journal of Political Economy, 2020, 128 (5), pp.1901-1939

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Related works:
Journal Article: Information Aversion (2020)
Working Paper: Information Aversion (2017)
Working Paper: Information Aversion (2017)
Working Paper: Information Aversion (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03052577

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