The ostrich effect: Selective attention to information

@article{Karlsson2009TheOE,
  title={The ostrich effect: Selective attention to information},
  author={Niklas P.E. Karlsson and George Loewenstein and Duane Seppi},
  journal={Journal of Risk and Uncertainty},
  year={2009},
  volume={38},
  pages={95-115}
}
We develop and test a model which links information acquisition decisions to the hedonic utility of information. Acquiring and attending to information increases the psychological impact of information (an impact effect), increases the speed of adjustment for a utility reference-point (a reference-point updating effect), and affects the degree of risk aversion towards randomness in news (a risk aversion effect). Given plausible parameter values, the model predicts asymmetric preferences for the… CONTINUE READING

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