18.07. Micro Theory Seminar: Philipp Strack
Micro Theory Seminar with Philipp Strack (University of California, Berkeley)
Event details  

What 

When 
Jul 18, 2018 from 16:30 to 17:45 
Where  faculty room 
Contact Name  Stephan Lauermann 
Contact Email  s.lauermann@unibonn.de 
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Topic
Modeling the Cost of Information
Abstract
We
provide an axiomatic theory of costly physical information acquisition.
In the framework of Blackwell 1951, we pursue a nonparametric approach
for determining the cost of an experiment. We consider three axioms of
physical information acquisition: 1) The cost of an experiment depends
only on its informational content; 2) Performing an experiment with
probability
1/2
requires
1/
2
the cost; and 3) the cost of observing two independent
experiments is the sum of the individual costs. We provide a simple
characterization of all continuous cost functions that satisfy the
axioms: they are positive linear combinations of KullbackLeibler
divergences.
If,
as in the recent literature, information acquisition is modeled as the
choice of a distribution over posteriors, our theory provides a cost of
physical information that, while simple, is technically and conceptually
different from the standard approach based on Shannon entropy, and
allows to express the idea that some states of the world are
intrinsically harder to distinguish than others.
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filed under:
Micro Theory Seminar