A decision-maker (DM) faces an intertemporal decision problem, where his payoff depends on actions taken across time as well as on an unknown Gaussian state. The DM can learn about the state from different (correlated) information sources, and allocates a budget of samples across these sources...

In the face of demand uncertainty, a monopolist can observe sales as a controlled reaction to its price and advertising so as to improve the choice of this marketing mix in the future. Furthermore, to upgrade its knowledge about demand the firm has the option to invest in external market...

Central and local governments around the world are seeking investments from private firms tocreate smart city solutions. Motivated by this, we model an investor and a local governmentwith a Stackelberg game. The investor has a CARA (or exponential) utility function and she hasan option to...

A sender who chooses a signal to reveal to a receiver can often influence the receiver's subsequent actions. Is persuasion more difficult when the receiver has her own sources of information? Does the receiver benefit from having additional information sources? We consider a Bayesian persuasion...

In this paper, I studied an information acquisition problem: a decision maker acquires information about payoff relevant states to facilitate decision making. My primary focus is on flexibility: the decision maker can choose any dynamic signal process as information source, subject to cost on...

This paper studies the effects of information acquisition in mergers and acquisitions (M&As). Information acquisition, proxied by downloads of filings on the SEC EDGAR website, improves the market’s assessment of deal synergies and the valuation of non-deal peer firms. Specifically, the...

When an agent receives information from a source whose accuracy might be either high or low, standard theory dictates that she update as if the source has medium accuracy. In a lab experiment, subjects deviate from this benchmark by reacting less to uncertain sources, especially when the sources...

Using a proprietary database from a large Chinese state-owned bank, we examine whether information evolved from banking relationships predicts commercial loan default by industrial firms. We find that the bank's relationship information is significantly linked to the incidence of default, and...

This paper presents a general framework for constructing and solving the multivariate static linear quadratic Gaussian (LQG) rational inattention tracking problem. We interpret the nature of the solution and the implied action of the agent, and we construct representations that formalize how the...

This paper presents the results of an experiment that demonstrates that personality may have a significant impact on economic decision making under uncertainty. This impact is indirect since differences in personality characteristics lead decision makers to seek different types of information...