Fantasy and Dread: The Demand for Information and the Consumption Utility of the Future
Management Science, Forthcoming
113 Pages Posted: 23 Dec 2013 Last revised: 1 Jun 2016
Date Written: May 16, 2016
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. In a third experiment, subjects make choices about when to get tested for a fictional disease. Some subjects behave in a way consistent with expected utility theory and others exhibit greater delay of information for more severe diseases. We also find that information choice is correlated with positive affect, ambiguity aversion, and time preference as some theories predict.
Keywords: anticipatory utility, intrinsic information preferences, information aversion, information avoidance, information-consumption complementarity, information-present-consumption substitutability, positive affect, sexually transmitted diseases, ostrich effect, time preferences
JEL Classification: D10, D83, I10
Suggested Citation: Suggested Citation