Neoclassical theory presumes that agents value instrumental information. In contrast, recent behavioral studies motivate and model information avoidance. We study preferences for and against instrumental information in a real-eﬀort task varying information structures on performance pay. Our study oﬀers three main results. First, we conﬁrm that both, preferences for and against instrumental information, exist. Second, information avoiders outperform information receivers. This result holds independently of eﬀects of self-selection. Third, our ﬁndings about information avoiders can be aligned with behavioral theories of optimistic belief design.
More Eﬀort with Less Pay: On Information Avoidance, Optimistic Beliefs, and Performance
Steffen Huck, Nora Szech and Lukas Wenner