Asymmetric Information, Nonadditive Expected Utility, and the Information Revealed by Prices: An Example
Jean-Marc Tallon ()
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I develop a simple example of a model in which agents have asymmetric information, and preferences that are represented by a nonadditive expected utility function. The a priori uninformed agent, after observing the equilibrium price, has conditional beliefs that remain nonadditive. Then, even when the equilibrium price function is fully revealing (i.e., one-to-one), it may be worth-while for an a priori uninformed agent to buy `redundant' private information if he is more confident in that information than in that revealed by the price system.
Keywords: Nonadditive; Expected; Utility (search for similar items in EconPapers)
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Published in International Economic Review, Wiley, 1998, 39 (2), pp.329-342
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Journal Article: Asymmetric Information, Nonadditive Expected Utility, and the Information Revealed by Prices: An Example (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00502491
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