Hidden Information Acquisition and Static Choice

This note explores the consequence of hidden information acquisition for static decision theory. \Ve show that any choice correspondence in the observable problem can be consistent with some well-behaved choice correspondence in an unobservable metaproblem with costly information acquisition. This illustrates how choices may not satisfy standard assumptions because a decision maker's decision process (in this case, information acquisition) depends on her choice set. It also illustrates the importance of modeling the source of violations of standard assumptions, rather than simply weakening axioms on preferences.