The value of information in production economies (Q5952427): Difference between revisions

For decades, economists have conjectured that the value of information may not be necessarily positive in decision making. Moreover, it is known that Blackwell's theorem [\textit{D. Blackwell}, Ann. Math. Stat. 24, 265-272 (1953; Zbl 0050.36004)] which claims that the value of information is always, does not hold in many economic circumstances. In particular, in exchange economies with random endowments it may fail completely. In this paper the author shows that in certain economies with risk averse consumers and risk neutral producers, the Blackwell theorems holds in a competitive equilibrium, given that risk sharing markets are absent. However, in the presence of a risk market it is shown that for utility functions of constant relative risk aversion type, all agents may become slightly worse off with better information.