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The Economics of Curiosity

Author

Listed:
  • Jeong-Yoo Kim, Haeree Lee, Insik Min

    (Kyung Hee University, Columbia University, Kyung Hee University)

Abstract

We develop the hypothesis that an individual can get some value of information, even if they do not use the information for his subsequent decision, contrary to the expected utility theory. Curiosity is associated with the direct utility from information and is defined formally by using the concept of entropy. We can measure an agent's curiosity level by the maximum amount of money that he is willing to pay in order to obtain the information thereby reducing the entropy. We test the hypothesis from lab experiments and obtain the empirical evidence that people are actually willing to pay a positive amount of money to obtain payoff-irrelevant information. Also, the comparison of the coefficients of variation for our curiosity measure and the IPI (Imaginal Processes Inventory) curiosity measure which is widely used in psychology suggests that our measure is more informative.

Suggested Citation

  • Jeong-Yoo Kim, Haeree Lee, Insik Min, 2013. "The Economics of Curiosity," Korean Economic Review, Korean Economic Association, vol. 29, pages 23-50.
    • Handle: RePEc:kea:keappr:ker-20130630-29-1-02
    as

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    References listed on IDEAS

    as
    1. Jacob Marschak, 1959. "Remarks on the Economics of Information," Cowles Foundation Discussion Papers 70, Cowles Foundation for Research in Economics, Yale University.
    2. Hirshleifer, Jack, 1971. "The Private and Social Value of Information and the Reward to Inventive Activity," American Economic Review, American Economic Association, vol. 61(4), pages 561-574, September.
    3. Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Curiosity; Entropy; Shannon Value;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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    Access and download statistics

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