Seminar 218, Psychology and Economics: Preferences for the Resolution of Uncertainty and the Timing of Information
Seminar | September 3 | 2-3:30 p.m. | 648 Evans Hall
Kirby Nielsen, Stanford University / California Institute of Technology
Link to Working Paper
We present results from a laboratory experiment designed to identify preferences over the resolution of uncertainty and timing of non-instrumental information acquisition in a rich choice set. Treatments vary whether the outcome previously has been determined, as in an information structure, or is determined later, as in a compound lottery. We find that individuals prefer to delay uncertainty resolution when the outcome has not been determined and prefer to expedite uncertainty resolution when the outcome has already occurred. Preferences are strict, as individuals are willing to pay for information in one treatment and they pay to avoid information in the other. We find no evidence of an aversion to gradual resolution in either context.