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TOPIC:
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OPTIMAL DYNAMIC INFORMATION ACQUISITION
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ABSTRACT
I study a dynamic model in which a decision maker (DM) acquires information about the payoffs of different alternatives prior to making her decision. The key feature of the model is the flexibility of information: the DM can choose any dynamic signal process as an information source, subject to a flow cost that depends on the informativeness of the signal. Under the optimal policy, the DM looks for a signal that arrives according to a Poisson process. The optimal Poisson signal confirms the DM’s prior belief and is sufficiently accurate to warrant an immediate action. Over time, absent the arrival of a Poisson signal, the DM continues seeking an increasingly more precise but less frequent Poisson signal.
Keywords: Dynamic information acquisition, rational inattention, Poisson process.
JEL Codes: D11, D81, D83.
Click here to view the paper.
Click here to view the CV.
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PRESENTER
Weijie Zhong
Yale University
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RESEARCH FIELDS
Microeconomic Theory
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DATE:
12 March 2020 (Thursday)
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TIME:
2pm - 3.30pm
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VENUE:
Meeting Room 5.1, Level 5
School of Economics
Singapore Management University
90 Stamford Road
Singapore 178903
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