Complexity of Information

The aim of this project investigates the impact of the complexity of the information structure on the demand for information, belief updating, and decision-making, and how these relationship depends on the level cognitive ability. Specifically, we investigate a novel notion of complexity related to the interpretability of information and choice indifference that is overlooked in the literature. With a series of experiments, we analyze whether and how much individuals prefer “simple” but noisy information structure over “complex” but informative information structure, and thus document an informativeness-complexity trade-off. We also shed light on the underlying mechanism of the informativeness-complexity trade-off.