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Information Acquisition in Affiliated Decision Problems

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  • Nicola Persico

Abstract

This paper investigates information acquistion in decision problems. We introduce a new notion of "better information", Accuracy-order (A-order), defined on continuous families of signals. Accuracy formalizes the idea that "a signal that is more correlated with the unknown random variable is better". This concept is indigenous to an economically interesting subset of all decision problems, those where signals are affiliated and the payoff function satisfies the single-crossing property. On this subset, this notion is found to be "tight", in the sense that A-order is an if-and-only-if condition for better information. Thus, a Blackwell-type result is obtained. On the subset, it is shown that Blackwell's Sufficiency is a special case of Accuracy. Finally, a comparative statics result is obtained, about which decision problem will induce more information acquistion.

Suggested Citation

  • Nicola Persico, 1996. "Information Acquisition in Affiliated Decision Problems," Discussion Papers 1149, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:1149
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    Cited by:

    1. Nicola Persico, 2000. "Information Acquisition in Auctions," Econometrica, Econometric Society, vol. 68(1), pages 135-148, January.
    2. Ahmed, Rafayal & Shopp, Colin, 2022. "How Does Competition Affect Incentives for Market Research?," MPRA Paper 118311, University Library of Munich, Germany.
    3. Dubra Juan & Echenique Federico, 2001. "Monotone Preferences over Information," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 1(1), pages 1-18, December.
    4. Ian M. Schmutte & Nathan Yoder, 2022. "Information Design for Differential Privacy," Papers 2202.05452, arXiv.org, revised Dec 2022.

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