Fantasy and Dread: The Demand for Information and the Consumption Utility of the Future
Ananda R. Ganguly
Claremont McKenna College - Robert Day School of Economics and Finance
Claremont Colleges - Claremont Graduate University
May 28, 2014
Claremont McKenna College Robert Day School of Economics and Finance Research Paper
Understanding the properties of intrinsic information preference is important for predicting behavior in many domains including finance and health. We present evidence that intrinsic demand for information about the future is increasing in expected future consumption utility. In the first experiment subjects may resolve a lottery now or later. The information is useless for decision making but the larger the reward, the more likely subjects are to pay to resolve the lottery early. In the second experiment subjects may pay to avoid being tested for HSV-1 and the more highly feared HSV-2. Subjects are three times more likely to avoid testing for HSV-2, suggesting that more aversive outcomes lead to more information avoidance. We also find that intrinsic information demand is negatively correlated with positive affect and ambiguity aversion.
Number of Pages in PDF File: 49
Keywords: anticipatory utility, information avoidance, positive affect, information-consumption complementarity, preference for presence
JEL Classification: D10, D83, I12
Date posted: December 23, 2013 ; Last revised: May 29, 2014
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