Strategic ignorance as a self-disciplining device. Carrillo, J. D. & Mariotti, T. The Review of economic studies, 67(3):529–544, 2000. 1abstract bibtex We analyse the decision of an agent with time-inconsistent preferences to consume a good that exerts an externality on future welfare. The extent of the externality is initially unknown, but may be learned via a costless sampling procedure. We show that when the agent cannot commit to future consumption and learning decisions, incomplete learning may occur on a Markov perfect equilibrium path of the resulting intra-personal game. In such a case, each agent's incarnation stops learning for some values of the posterior distribution of beliefs and acts under self-restricted information. This conduct is interpreted as strategic ignorance. All equilibria featuring this property strictly Pareto dominate the complete learning equilibrium for any posterior distribution of beliefs.
@article{carrillo_strategic_2000,
title = {Strategic ignorance as a self-disciplining device},
volume = {67},
issn = {1467-937X},
abstract = {We analyse the decision of an agent with time-inconsistent preferences to consume a good that exerts an externality on future welfare. The extent of the externality is initially unknown, but may be learned via a costless sampling procedure. We show that when the agent cannot commit to future consumption and learning decisions, incomplete learning may occur on a Markov perfect equilibrium path of the resulting intra-personal game. In such a case, each agent's incarnation stops learning for some values of the posterior distribution of beliefs and acts under self-restricted information. This conduct is interpreted as strategic ignorance. All equilibria featuring this property strictly Pareto dominate the complete learning equilibrium for any posterior distribution of beliefs.},
language = {eng},
number = {3},
journal = {The Review of economic studies},
author = {Carrillo, Juan D. and Mariotti, Thomas},
year = {2000},
note = {1},
keywords = {12 Ignorance in other disciplinary fields, Ignorance in economics, PRINTED (Fonds papier)},
pages = {529--544},
}
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