The value of information when preferences are dynamically inconsistent

The paper reviews the main findings on individual decision making under tim e inconsistent preferences, incomplete information, and different learning environments. First, when agents choose whether to learn or not, avoiding c ostless information can be their optimal strategy. Strategic ignorance pred icts a systematic bias in the agents' perceived payoff. Second, when inform ation flows exogenously (as in the literature on investment under uncertain ty), agents may undertake irreversible investments anticipating expected lo sses. Such decisions are taken only as a commitment device against the acqu isition of future information undesirable from the current perspective. Fur thermore, several equilibria coexist: the agent will succeed in avoiding in vestments with losses or not depending on the degree of trust on his future behavior. Third, under learning through consumption, abstention can be par t of an equilibrium strategy in activities where moderate consumption (if f easible) would yield a higher payoff. (C) 2000 Elsevier Science B.V. All ri ghts reserved. JEL classification: A12; D81; D83: D92; G39.