Does information change behavior?

Date
2009-11-02
Authors
Huffman, Wallace
Huffman, Wallace
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Economics
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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.

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moral hazard, information economics, consumer behavior, behavioral economics, adverse selection
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