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arXiv · 2603.11453

Persistence, patience and costly information acquisition

Benjamin Davies
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Abstract

A forward-looking agent observes signals of a state that follows a Gaussian AR(1) process. He balances the cost of having imprecise beliefs with the cost of acquiring more precise signals. I characterize his optimal information acquisition policy, and analyze how his steady-state beliefs and costs depend on persistence (the AR(1) parameter) and patience (the agent's discount factor). Higher persistence has a non-monotone effect on belief precision and raises overall costs. Higher patience makes beliefs more precise and lowers overall costs.

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Benjamin Davies. 2026-03-12. Persistence, patience and costly information acquisition. https://doi.org/10.1016/j.econlet.2026.113060

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