Figure 3 - uploaded by Osnat Zohar
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The paper compares two types of models in which agents observe imperfect private signals about the state of the world. In the first type of models, agents receive the signals independently of their actions; namely, learning is exogenous. This category includes the noisy and sticky information models. In the second type of models, the signals result...
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Context 1
... quantify the real effects of information rigidities, I focus on the gap between A * t and A t in absolute terms. Its expected value, given the current and the previous states, is denoted by L: Figure 3 illustrates the mean of L, conditional on y t in the upper row and conditional on y t−1 in the lower row. In all models, the loss is generated by agents who hold inaccurate information about y t that incentivizes them to take the non-optimal action (invest even though y t < 0 or avoid investment even though y t ≥ 0). ...
