Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/253444 
Authors: 
Year of Publication: 
2020
Citation: 
[Journal:] Theoretical Economics [ISSN:] 1555-7561 [Volume:] 15 [Issue:] 3 [Publisher:] The Econometric Society [Place:] New Haven, CT [Year:] 2020 [Pages:] 1059-1094
Publisher: 
The Econometric Society, New Haven, CT
Abstract: 
We commonly think of information as an instrument for better decisions, yet evidence suggests that people often decline free information in non-strategic scenarios. This paper provides a theory for how a dynamically-consistent decision maker can be averse to partial information as a consequence of ambiguity aversion. It introduces a class of recursive preferences on an extended choice domain, which allows the preferences to depend on how information is dynamically revealed and to depart from the standard expected-utility theory. A new notion of ambiguity aversion, called Event Complementarity, exactly characterizes aversion to partial information. Familiar static ambiguity-averse preferences are embedded into the general recursive model, in which conditions for partial information aversion are identified. The findings suggest that Event Complementarity overlaps with yet still differs from the conventional notion of ambiguity aversion.
Subjects: 
Information avoidance
ambiguity aversion
recursive preferences
JEL: 
D81
D83
D90
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Article

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