Uncertainty and Denial: A Resource-Rational Model of the Value of Information

Classical decision theory predicts that people should be indifferent to information that is not useful for making decisions, but this model often fails to describe human behavior. Here we investigate one such scenario, where people desire information about whether an event (the gain/loss of money) will occur even though there is no obvious decision to be made on the basis of this information. We find a curious dual trend: if information is costless, as the probability of the event increases people want the information more; if information is not costless, people's desire for the information peaks at an intermediate probability. People also want information more as the importance of the event increases, and less as the cost of the information increases. We propose a model that explains these results, based on the assumption that people have limited cognitive resources and obtain information about which events will occur so they can determine whether to expend effort planning for them.