CFDP 1208

Preference for Information and Dynamic Consistency

Publication Date: January 1999

Pages: 18

Abstract: 

We provide necessary and sufficient conditions for a dynamically consistent agent always to prefer more informative signals (in single-agent problems). These conditions do not imply recursivity, reduction or independence. We provide a simple definition of dynamically consistent behavior, and we discuss whether an intrinsic information lover (say, an anxious person) is likely to be dynamically consistent.

Keywords: 

Information, non-expected utility, dynamic consistency, randomization, anxiety

Note: 

Published in Theory and Decision (May 2000), 48(3): 263-286 [Springer]