Duraj, Jetlir; He, Kevin - In: Theoretical economics : TE ; an open access journal in … 19 (2024) 3, pp. 1057-1086
A Bayesian agent experiences gain-loss utility each period over changes in belief about future consumption (''news utility''), with diminishing sensitivity over the magnitude of news. Diminishing sensitivity induces a preference over news skewness: gradual bad news, one-shot good news is worse...