Costly Information Acquisition and Optimal Information Choice

Kemal Ozbek

    Research output: Working paper


    This paper studies the problem of costly information acquisition by focusing on the case of linear costs (e.g., rational inattention), and provides a characterization of optimal information using a supporting hyperplane argument. The characterization result is also applied on a pricing problem in a single buyer-seller setting, where the buyer can acquire information before purchasing a risky project from the seller. It is shown that the optimal price should be non-monotonic in the degree of the buyer's cost of information acquisition.
    Original languageEnglish
    Number of pages24
    Publication statusSubmitted - 2018


    • Information acquisition
    • non-monotonic pricing
    • rational inattention
    • supporting hyperplane


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