Neighborhood-Based Information Costs

• 成果类型: Article
• 署名作者: Hebert, Benjamin; Woodford, Michael
• 署名单位: Stanford University; Columbia University
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20200154
• 发表日期: 2021
• 页码: 3225-3255
• 关键词: Strategic uncertainty; COORDINATION; acquisition

摘要

We derive a new cost of information in rational inattention problems, the neighborhood-based cost functions, starting from the observation that many settings involve exogenous states with a topological structure. These cost functions are uniformly posterior separable and capture notions of perceptual distance. This second property ensures that neighborhood-based costs, unlike mutual information, make accurate predictions about behavior in perceptual experiments. We compare the implications of our neighborhood-based cost functions with those of the mutual information in a series of applications: perceptual judgments, the general environment of binary choice, regime-change games, and linear-quadratic-Gaussian settings.