Asymmetries in information processing in a decision theory framework

Luís Santos-Pinto

MPRA Paper from University Library of Munich, Germany

Abstract: Research in psychology suggests that some individuals are more sensitive to positive than to negative information while others are more sensitive to negative rather than positive information. I take these cognitive positive-negative asymmetries in information processing to a Bayesian decision-theory model and explore its consequences in terms of decisions and payoffs. I show that in monotone decision problems economic agents with more positive-responsive information structures are always better off, ex-ante, when they face problems where payoffs are relatively more sensitive to the action chosen when the state of nature is favorable.

Keywords: Information Processing; Decision Theory (search for similar items in EconPapers)
JEL-codes: A12 D81 (search for similar items in EconPapers)
Date: 2003-01-08, Revised 2007-04-27
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Related works:
Journal Article: Asymmetries in Information Processing in a Decision Theory Framework (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:3146

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