Review of Economic Studies Vol. 51 No. 3 1984
A Bayesian Approach to the Production of Information with a Linear Utility Function
Abstract
The paper considers the problem facing a consumer deciding whether to purchase a good whose effect on utility is unknown. The consumer is allowed to learn about the effect over time according to a Bayesian updating procedure. Of interest is the quantity of the good the consumer will purchase in the first period. The paper allows the consumer's budget constraint to be spread over more than one period and consequently generates results which contradicts earlier work.
- DOI
- 10.2307/2297438
- Volume
- 51
- Issue
- 3
- Pages
- 521
- Sources
- openalex crossref