Fondazione GRINS
Growing Resilient,
Inclusive and Sustainable
Galleria Ugo Bassi 1, 40121, Bologna, IT
C.F/P.IVA 91451720378
Finanziato dal Piano Nazionale di Ripresa e Resilienza (PNRR), Missione 4 (Infrastruttura e ricerca), Componente 2 (Dalla Ricerca all’Impresa), Investimento 1.3 (Partnership Estese), Tematica 9 (Sostenibilità economica e finanziaria di sistemi e territori).



Open Access
GRINS THEMATIC AREAS
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Adapting cursed equilibrium to a beauty contest game, we study the impact of information policies in settings where agents underinfer from equilibrium statistics. To discipline information acquisition with mislearning, we propose a subjective envelope condition which allows for a tractable analysis while maintaining behaviorally plausible assumptions: agents correctly anticipate their actions but incorrectly deem them optimal. We show that this condition characterizes the rest points of a simple learning process. Cursed agents use and acquire more private information, creating a positive externality. Welfare increases for low degrees of cursedness, as these gains exceed the losses from incorrect use. Transparency crowds out private information but always increases welfare. Policies targeting fundamental information may backfire as they distract cursed agents from a source of information they already underuse. Finally, we investigate the behavior and welfare of an atomistic rational agent in a cursed economy.
AKNOWLEDGEMENTS
This study was funded by the European Union - NextGenerationEU, in the framework of the GRINS - Growing Resilient, INclusive and Sustainable project (GRINS PE00000018). The views and opinions expressed are solely those of the authors and do not necessarily reflect those of the European Union, nor can the European Union be held responsible for them.
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