Beliefs and Utility: Experimental Evidence on Preferences for Information

70 Pages Posted: 13 Oct 2016

See all articles by Armin Falk

Armin Falk

briq - Institute on Behavior & Inequality

Florian Zimmermann

University of Bonn

Date Written: August 23, 2016

Abstract

Beliefs are a central determinant of behavior. Recent models assume that beliefs about or the anticipation of future consumption have direct utility consequences. This gives rise to informational preferences, i.e., preferences over the timing and structure of information. Using a novel and purposefully simple set-up, we experimentally analyze preferences for information along four dimensions. We find evidence that the majority of subjects prefers receiving information sooner. This preference, however, is not uniform but depends on context. When the environment allows subjects to not focus attention on (negative) consumption events, later information becomes more attractive. We also identify an aversion towards piecemeal information. Variations in prior distributions do not seem to affect information preferences.

Keywords: beliefs, anticipatory utility, news utility, information preferences, attention, reference-dependent preferences, experiments

JEL Classification: C910, D030, D120, D830

Suggested Citation

Falk, Armin and Zimmermann, Florian, Beliefs and Utility: Experimental Evidence on Preferences for Information (August 23, 2016). CESifo Working Paper Series No. 6061. Available at SSRN: https://ssrn.com/abstract=2851750

Armin Falk

briq - Institute on Behavior & Inequality

Schaumburg-Lippe-Stra├če 5-9
Bonn, 53113
Germany

HOME PAGE: http://www.briq-institute.org/

Florian Zimmermann (Contact Author)

University of Bonn ( email )

Regina-Pacis-Weg 3
Postfach 2220
Bonn, D-53012
Germany

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