Information Aversion

Marianne Andries and Valentin Haddad

No 23958, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The main features of households' attention to savings are rationalized by a model of information aversion, a preference-based fear of receiving flows of news. In line with the empirical evidence, information averse investors observe the value of their portfolios infrequently; inattention is more pronounced for more risk averse investors and in periods of low or volatile stock prices. The model also explains how changes in information frequencies affect risk-taking decisions, as observed in the field and the lab. Further, we find that receiving state-dependent alerts following sharp downturns improves welfare, suggesting a role for financial intermediaries as information managers.

JEL-codes: E03 E21 G02 G11 (search for similar items in EconPapers)
Date: 2017-10
New Economics Papers: this item is included in nep-exp, nep-mac and nep-upt
Note: AP EFG
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published as Marianne Andries & Valentin Haddad, 2020. "Information Aversion," Journal of Political Economy, vol 128(5), pages 1901-1939.

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Related works:
Journal Article: Information Aversion (2020)
Working Paper: Information Aversion (2020)
Working Paper: Information Aversion (2017)
Working Paper: Information Aversion (2014)
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