òòò½Íø Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Information Acquisition and Time-Risk Preference
òòò½Íø Review: Insights
(pp. 213–30)
Abstract
An agent acquires information dynamically until her belief about a binary state reaches an upper or lower threshold. She can choose any signal process subject to a constraint on the rate of entropy reduction. Strategies are ordered by "time risk"—the dispersion of the distribution of threshold-hitting times. We construct a strategy maximizing time risk (Greedy Exploitation) and one minimizing it (Pure Accumulation). Under either, beliefs follow a compensated Poisson process. In the former, beliefs jump to the threshold closer in Bregman divergence. In the latter, beliefs jump to the unique point with the same entropy as the current belief.Citation
Chen, Daniel, and Weijie Zhong. 2025. "Information Acquisition and Time-Risk Preference." òòò½Íø Review: Insights 7 (2): 213–30. DOI: 10.1257/aeri.20240216Additional Materials
JEL Classification
- D81 Criteria for Decision-Making under Risk and Uncertainty
- D82 Asymmetric and Private Information; Mechanism Design
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness