Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/159497
Authors: 
Barigozzi, Francesca
Levaggi, Rosella
Year of Publication: 
2009
Series/Report no.: 
Quaderni - Working Paper DSE 656
Abstract: 
We use a simple version of the Psychological Expected Utility Model (Caplin and Leahy, QJE, 2001) to analyze the optimal choice of information accuracy by an individual who is concerned with anticipatory feeling. The individual faces the following trade-off: on the one hand information may lead to emotional costs, on the other the higher the information accuracy, the higher the efficiency of decision-making. We completely and explicitly characterize how anticipatory utility depends on information accuracy, and study the optimal amount of information acquisition. We obtain simple and explicit conditions under which the individual prefers no-information or partial information gathering. We show that anomalous attitudes towards information can be more articulated than previously thought.
Persistent Identifier of the first edition: 
Creative Commons License: 
https://creativecommons.org/licenses/by-nc/3.0/
Document Type: 
Working Paper

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