Abstract
Research in psychology suggests that some individuals are more sensitive to positive than to negative information while others are more sensitive to negative rather than positive information. I take these cognitive positive–negative asymmetries in information processing to a Bayesian decision-theory model and explore its consequences in terms of decisions and payoffs. I show that in monotone decision problems economic agents with more positive-responsive information structures are always better off, ex ante, when they face problems where payoffs are relatively more sensitive to the action chosen when the state of nature is favorable.
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Santos-Pinto, L. Asymmetries in Information Processing in a Decision Theory Framework. Theory Decis 66, 317–343 (2009). https://doi.org/10.1007/s11238-007-9088-5
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DOI: https://doi.org/10.1007/s11238-007-9088-5