Searching for information

Arbeitspapier

This paper provides a microfounded information acquisition technology based on a simple framework with information search. When searchable information is limited, an agent encounters increasingly more redundant information in his search for new information. Redundancy slows down the learning process and generates decreasing returns. Furthermore, as multiple agents search for information from the same source, limited searchability leads to covariance as the acquired information becomes increasingly more overlapped among agents. Using an asymptotic approach, we construct a tractable mapping from resource (attention) allocations to the precision and the correlation of agents.information under varying degrees of searchability of information. We study two economic applica- tions with endogenous information acquisition using our model: (i) a "beauty contest" coordination game, and (ii) a noisy rational expectations equilibrium.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Sveriges Riksbank Working Paper Series ; No. 300

Classification and Topics

• Classification: Wirtschaft ; Miscellaneous Mathematical Tools ; Information, Knowledge, and Uncertainty: General ; Criteria for Decision-Making under Risk and Uncertainty ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Portfolio Choice; Investment Decisions ; Information and Market Efficiency; Event Studies; Insider Trading
• Subject: information processing ; concavity ; precision ; asymptotic analysis ; coordination games ; portfolio choice ; financial equilibrium

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Han, Jungsuk ; Sangiorgi, Francesco
• Event: Veröffentlichung
• (who): Sveriges Riksbank
• (where): Stockholm
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/129714
• Last update: 10.03.2025, 11:43 AM CET