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Andries, Marianne and Haddad, Valentin (2017) Information Aversion. TSE Working Paper, n. 17-779, Toulouse
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Abstract
We propose a theory of inattention solely based on preferences, absent cognitive limitations or external costs of information. Under disappointment aversion, agents are intrinsically information averse. In a consumption-savings problem, we study how information averse agents cope with their fear of information, to make better decisions: they acquire information at infrequent intervals only, and inattention increases when volatility is high, consistent with the empirical evidence. Adding state-dependent alerts following sharp downturns improves welfare, despite the additional endogenous information costs. Our framework accommodates a broad range of applications, suggesting our approach can explain many observed features of decision under uncertainty.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | March 2017 |
| Place of Publication: | Toulouse |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse), TSM Research (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 17 Mar 2017 15:27 |
| Last Modified: | 23 May 2019 12:18 |
| OAI Identifier: | oai:tse-fr.eu:28621 |
| URI: | https://publications.ut-capitole.fr/id/eprint/23189 |
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- Information Aversion. (deposited 17 Mar 2017 15:27) [Currently Displayed]
