Expectations with Endogenous Information Acquisition: An Experimental Investigation

13.11.2019 14:15 – 15:45

INSTITUTE OF ECONOMICS AND ECONOMETRICS SEMINAR / ABSTRACT

We use a survey experiment to generate direct evidence on how people acquire and process information. Participants can buy different information signals that could help them forecast the future median national home price. Participants put substantial value on their preferred signal and, when acquired, use the signal in the formation of their expectations. However, they disagree on which signal to buy. As a result, making information cheaper does not decrease the cross-sectional dispersion of expectations. We provide a model with costly acquisition and processing of information, and show that it can match almost all of our empirical results.

Lieu

Bâtiment: Uni Mail

Bd du Pont-d'Arve 40
1205 Geneva

Room: M 3250, 3rd floor

entrée libre