Costly learning under ambiguity
Costly learning under ambiguity
In this paper, we propose a general model of information acquisition, Costly Bayesian Learning (CBL). Using menu choice framework, we provide an axiomatic characterization of the model, identify its parameters, apply a comparative statics, as well as study special cases of the model. Unlike many prominent models of information acquisition (e.g., the Rational Inattention model), a CBL agent can exhibit uncertainty averse behavior and prefer late resolution of uncertainty.
Attitudes towards the timing of uncertainty, Costly information acquisition, Hedging, Posteriorwise dominance, Second-order rational inattention, Uncertainty aversion
Ozbek, Kemal
e7edfcf5-cb17-4e64-bfa4-30fb527d2e46
9 December 2024
Ozbek, Kemal
e7edfcf5-cb17-4e64-bfa4-30fb527d2e46
Abstract
In this paper, we propose a general model of information acquisition, Costly Bayesian Learning (CBL). Using menu choice framework, we provide an axiomatic characterization of the model, identify its parameters, apply a comparative statics, as well as study special cases of the model. Unlike many prominent models of information acquisition (e.g., the Rational Inattention model), a CBL agent can exhibit uncertainty averse behavior and prefer late resolution of uncertainty.
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CBL_Nov17
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Accepted/In Press date: 28 November 2024
e-pub ahead of print date: 4 December 2024
Published date: 9 December 2024
Keywords:
Attitudes towards the timing of uncertainty, Costly information acquisition, Hedging, Posteriorwise dominance, Second-order rational inattention, Uncertainty aversion
Identifiers
Local EPrints ID: 496884
URI: http://eprints.soton.ac.uk/id/eprint/496884
ISSN: 0304-4068
PURE UUID: 5f930d33-3e4f-4e75-ab98-25b74c3f54e0
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Date deposited: 08 Jan 2025 11:30
Last modified: 22 Aug 2025 02:28
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