SMU SOE Seminar (Mar 12, 2020, 2-3.30pm): 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.
		PRESENTER Weijie Zhong Yale University
		RESEARCH FIELDS Microeconomic Theory
		DATE: 12 March 2020 (Thursday)
		TIME: 2pm - 3.30pm
		VENUE: Meeting Room 5.1, Level 5 School of Economics Singapore Management University 90 Stamford Road Singapore 178903