Abstract

Lore has it that a fundamental principle of Bayesian rationality is for decision makers to never turn down the offer of free information. Cost-free information can only help you, never hurt you, and in the worst case will leave you at status quo ante. Purported exceptions to this principle are no exceptions at all, but instead involve a hidden cost to learning. Make those costs plain and the problem you face is one of balancing the quality of a choice against the costs to you of carrying it out, a trade-off that Bayesian methods are ideally suited to solve.