Document Type
Article
Publication Date
8-19-2020
Abstract
We consider the issue of how timing of provision of additional information affects information-acquisition incentives. In environments with costly attention, a sufficiently confident agent may choose to act based on the prior, without incurring those costs. However, a promise of additional information in the future may be used to encourage additional attentional effort. This may be viewed as a novel empirical implication of rational inattention. In a lab experiment designed to test this theoretical prediction, we show that promise of future “free” information induces subjects to acquire information which they would not be acquiring without such a promise.
Recommended Citation
Aycinena, D., Elbittar, A. Gomberg, A., & Rentschler, L. (2020). Does free information provision crowd out costly information acquisition? It’s a matter of timing. ESI Working Paper 20-26. https://digitalcommons.chapman.edu/esi_working_papers/321/
Comments
ESI Working Paper 20-26
Previously titled "Rational Inattention and Timing of Information Provision".
This article later underwent peer review and was published as:
Aycinena, D., Elbittar, A. Gomberg, A., & Rentschler, L. (2023). Does free information provision crowd out costly information acquisition? It’s a matter of timing. Games and Economic Behavior, 141, 182-195. https://doi.org/10.1016/j.geb.2023.05.006