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Norio Takeoka (Hitotsubashi University) – "Information Acquisition with Subjective Waiting Costs"
CREST Internal Seminar in Microeconomics :
Date: 02nd Dec. 2019
Place: Room 3105.
Norio Takeoka (Hitotsubashi University) – “Information Acquisition with Subjective Waiting Costs”
Abstract: Information acquisition is an important aspect of decision making. Acquiring information is costly, as in the literature of rational inattention, but the cost of information acquisition is not typically observable and hence it is not obvious how it can be measured. Using preference over menus, de Oliveira, Denti, Mihm, and Ozbek (2017) provide an axiomatic foundation for the additive costs model of information acquisition. On the other hand, if obtaining signals from experiments is time-consuming, such as in the case of a long-run investment decision, costs may be measured as a discount factor or waiting time for acquiring information. We provide an axiomatic foundation for such an alternative model and identify unique discounting costs. To prove the main theorem, we borrow techniques from the literature of choice under ambiguity. Our representation has a parallel relationship with the confidence representation of Chateauneuf and Faro (2009). We first show, as an intermediate lemma, that our axioms ensure a counterpart of the uncertain averse representation of Cerreia-Vioglio, Maccheroni, Marinacci, and Montrucchio (2011) and then specialize it into the confidence-class representation.