TY - JOUR
T1 - The value of information
T2 - The case of signal-dependent opportunity sets
AU - Sulganik, Eyal
AU - Zilcha, Itzhak
PY - 1997/8
Y1 - 1997/8
N2 - We generalize the economic decision problem considered by Blackwell (1953) in which a decision-maker chooses an action after observing a signal correlated to the state of nature. Unlike Blackwell's case where the feasible set is fixed, in our framework the feasible set of actions depends on the signal and the information system. We argue that such a framework has more significance to economic models. As was demonstrated by Hirshleifer (1971) in such cases, contrary to Blackwell's well-known result, more information may be disadvantageous. We derive conditions for this general model which guarantee that more information is beneficial.
AB - We generalize the economic decision problem considered by Blackwell (1953) in which a decision-maker chooses an action after observing a signal correlated to the state of nature. Unlike Blackwell's case where the feasible set is fixed, in our framework the feasible set of actions depends on the signal and the information system. We argue that such a framework has more significance to economic models. As was demonstrated by Hirshleifer (1971) in such cases, contrary to Blackwell's well-known result, more information may be disadvantageous. We derive conditions for this general model which guarantee that more information is beneficial.
KW - Information
KW - Signal dependent
UR - http://www.scopus.com/inward/record.url?scp=0031206149&partnerID=8YFLogxK
U2 - 10.1016/S0165-1889(97)00039-0
DO - 10.1016/S0165-1889(97)00039-0
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AN - SCOPUS:0031206149
SN - 0165-1889
VL - 21
SP - 1615
EP - 1625
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
IS - 10
ER -