Rational Inattention and Timing of Information Provision

We consider the issue of how timing of provision of additional information affects information-acquisition incentives. In environments with costly attention, a sufi¬ciently coni¬dent agent may choose to act based on the prior, without incurring those costs. However, a promise of additional information in the future may be used to encourage additional attentional effort. This may be viewed as a novel empirical implication of rational inattention. In a lab experiment designed to test this theoretical prediction, we show that promise of future “free” information induces subjects to acquire information which they would not be acquiring without such a promise.