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The Demand for Information and the Distribution of Income

Published online by Cambridge University Press:  27 July 2009

Kenneth J. Arrow
Kenneth J. Arrow
Affiliation:
Department of Economics and OperationsResearch Stanford University Stanford, California
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Abstract

Investors can increase their payoff by acquiring information on rates of return. The value of the information is greater, the greater the amount to be invested. Therefore, information purchased and consequently the expected rate of return increases with initial wealth, and the distribution of final wealth is more unequal than that of initial wealth.

Type
Articles
Information
Probability in the Engineering and Informational Sciences , Volume 1 , Issue 1 , January 1987 , pp. 3 - 13
Copyright
Copyright © Cambridge University Press 1987

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References

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