American Economic Review Vol. 102 No. 3 2012

Information Choice Technologies

Christian Hellwig¹; Sebastian Kohls²; Laura Veldkamp³

¹ University Toulouse, Toulouse School of Economics, Manufacture de Tabacs, 21 Allees de Brienne, 31000 Toulouse, France. · ² Northwestern University, 2001 Sheridan Rd., Evanston, IL 60208. · ³ New York University, Stern School of Business, 44 West Fourth St., Rm 7-77, New York, NY 10012.

Abstract

Theories based on information costs or frictions have become increasing popular in macroeconomics and macro-finance. The literature has used various types of information choices, such as rational inattention, inattentiveness, information markets and costly precision. Using a unified framework, we compare these different information choice technologies and explain why some generate increasing returns and others, particularly those where agents choose how much public information to observe, generate multiple equilibria. The results can help applied theorists to choose the appropriate information choice technology for their application and to understand the consequences of that modeling choice.

DOI

10.1257/aer.102.3.35

Volume

102

Issue

3

Pages

35-40

Language

en

Sources

bibtex:phds-export.bib openalex crossref

Cite

APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓