Article

Information Aversion

Marianne Andries et Valentin Haddad

Résumé

Information aversion, a preference-based fear of news flows, has rich implications for decisions involving information and risk-taking. It can explain key empirical patterns on how households pay attention to savings, namely that investors observe their portfolios infrequently, particularly when stock prices are low or volatile. Receiving state-dependent alerts following sharp market downturns such as during the financial crisis of 2008 improves welfare. Information averse investors display an ostrich behavior: overhearing negative news prompts more inattention. Their fear of frequent news encourages them to hold undiversified portfolios.

Remplace

Marianne Andries et Valentin Haddad, « Information Aversion », TSE Working Paper, n° 17-779, mars 2017.

Référence

Marianne Andries et Valentin Haddad, « Information Aversion », Journal of Political Economy, 2020, à paraître.

Publié dans

Journal of Political Economy, 2020, à paraître