An Information-Gap Theory of Feelings About Uncertainty

We propose a theory of feelings about uncertainty that has implications for preferences about acquiring or avoiding information as well as for preferences about exposure to uncertainty (i.e., risk or ambiguity). Our theoretical framework allows utility to depend not just on material payoffs but also on beliefs and the attention devoted to them. We use this framework to introduce the concept of an information gap – a specific uncertainty that one recognizes and is aware of. We characterize a specific utility function that describes feelings about information gaps. We suggest that feelings about information gaps are the source of curiosity as well as a second motive to manage one’s thoughts through information acquisition or avoidance. In addition, we suggest that feelings about information gaps also contribute to riskand ambiguity preferences.