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Does information change behavior?

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  • Huffman, Wallace E.

Abstract

This paper reviews and synthesizes the theory of information economics and empirical evidence on how information changes the behavior of consumers, households and firms. I show that consumers respond to new information in food experiments but perhaps not in retirement account management. Some seeming perverse consumer/investor decision making may be a result of a complex decision with a low expected payoff.

Suggested Citation

  • Huffman, Wallace E., 2009. "Does information change behavior?," ISU General Staff Papers 200911020800001150, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genstf:200911020800001150
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    1. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
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    6. Huffman, Wallace E. & Tegene, Abebayehu, 2002. "Public Acceptance of and Benefits from Agricultural Biotechnology: A Key Role for Verifiable Information," Staff General Research Papers Archive 10435, Iowa State University, Department of Economics.
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    8. Matthew Rousu & Wallace E. Huffman & Jason F. Shogren & Abebayehu Tegene, 2007. "Effects And Value Of Verifiable Information In A Controversial Market: Evidence From Lab Auctions Of Genetically Modified Food," Economic Inquiry, Western Economic Association International, vol. 45(3), pages 409-432, July.
    9. John Beshears & James J. Choi & David Laibson & Brigitte C. Madrian, 2009. "The Importance of Default Options for Retirement Saving Outcomes: Evidence from the United States," NBER Chapters, in: Social Security Policy in a Changing Environment, pages 167-195, National Bureau of Economic Research, Inc.
    10. Huffman, Wallace E. & Orazem, Peter F., 2007. "Agriculture and Human Capital in Economic Growth: Farmers, Schooling and Nutrition," Handbook of Agricultural Economics, in: Robert Evenson & Prabhu Pingali (ed.), Handbook of Agricultural Economics, edition 1, volume 3, chapter 43, pages 2281-2341, Elsevier.
    11. Huffman, Wallace E. & Rousu, Matthew & Shogren, Jason F. & Tegene, Abebayehu, 2007. "The effects of prior beliefs and learning on consumers' acceptance of genetically modified foods," Journal of Economic Behavior & Organization, Elsevier, vol. 63(1), pages 193-206, May.
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