The Value of Information: The Case of Signal-Dependent Opportunity Sets

We generalize the economic decision problem considered by Blackwell (1953) in which a decision maker chooses an action after observing a signal correlated to the state of nature. Unlike Blackwell's case where the feasible set is fixed, in our framework, the feasible set of actions depends on the signal and the information system. As we indicate such a framework has more significance to economic models. We show that in this case, contrary to Blackwell's well-known result, more information may be disadvantageous. We derive conditions for this general model which guarantee that more information is beneficial.


Issue Date:
1996-01
Publication Type:
Working or Discussion Paper
DOI and Other Identifiers:
Record Identifier:
https://ageconsearch.umn.edu/record/275613
Language:
English
Total Pages:
22
Series Statement:
Working Paper No. 1-96




 Record created 2018-08-01, last modified 2020-10-28

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