A Bayesian approach to the production of information with a linear utility function

Ian Tonks

Research output: Contribution to journalArticle

Abstract

The paper considers the problem facing a consumer deciding whether to purchase a good whose effect on utility is unknown. The consumer is allowed to learn about the effect over time according to a Bayesian updating procedure. Of interest is the quantity of the good the consumer will purchase in the first period. The paper allows the consumer's budget constraint to be spread over more than one period and consequently generates results which contradicts earlier work.
Original languageEnglish
Pages (from-to)521-527
JournalThe Review of Economic Studies
Volume51
Issue number3
DOIs
Publication statusPublished - Jul 1984

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