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Making Information More Valuable

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  • Mark Whitmeyer

Abstract

We study what changes to an agent's decision problem increase her value for information. We prove that information becomes more valuable if and only if the agent's reduced-form payoff in her belief becomes more convex. When the transformation corresponds to the addition of an action, the requisite increase in convexity occurs if and only if a simple geometric condition holds, which extends in a natural way to the addition of multiple actions. We apply these findings to two scenarios: a monopolistic screening problem in which the good is information and delegation with information acquisition.

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  • Mark Whitmeyer, 2022. "Making Information More Valuable," Papers 2210.04418, arXiv.org, revised Dec 2023.
    • Handle: RePEc:arx:papers:2210.04418
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    References listed on IDEAS

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    1. Luciano Pomatto & Philipp Strack & Omer Tamuz, 2018. "The Cost of Information: The Case of Constant Marginal Costs," Papers 1812.04211, arXiv.org, revised Feb 2023.
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    8. Michel de Lara & L. Gilotte, 2007. "A tight sufficient condition for Radner-Stiglitz nonconcavity in the value of information," Post-Print hal-00716396, HAL.
    9. Chade, Hector & Schlee, Edward, 2002. "Another Look at the Radner-Stiglitz Nonconcavity in the Value of Information," Journal of Economic Theory, Elsevier, vol. 107(2), pages 421-452, December.
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    Cited by:

    1. Mark Whitmeyer, 2024. "Can One Hear the Shape of a Decision Problem?," Papers 2403.06344, arXiv.org, revised Apr 2024.

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