On a homogeneous oligopoly market informed sellers are fully aware of market demand whereas uninformed sellers only know the distribution. We first derive the market results when sellers are risk averse, similarly to Ponssard (1979) who assumed risk neutrality throughout. With the help of these...

The paper analyzes the interactions between the precision of information, trade and welfare within a decision framework of an exporting firm. Information in a financial market is described in terms of a publicly observable signal. With higher transparency, the signal conveys more precise...

This paper shows how travellers that are faced with a series of risky choices become behaviourally inert due to a combination of risk aversion and learning. Our theoretical analyses complement other studies that conceive inertia as resulting from the wish to save cognitive resources. We first...

We develop a tractable framework incorporating ambiguity aversion into rational inattention. We model uncertainty using smooth ambiguity (Klibanoff, Marinacci, and Mukerji, 2005) and define entropy-based information costs on the predictive prior distribution, which allows us to rewrite the...

We propose a model of instrumental belief choice under loss aversion. When new information arrives, an agent is prompted to abandon her prior. However, potential posteriors may induce her to take actions that generate a lower utility in some states than actions induced by her prior. These losses...