The Korean Economic Review
The Economics of Curiosity
Jeong-Yoo Kim (Kyung Hee University), Haeree Lee (Columbia University) and Insik Min (Kyung Hee University)Year 2013Vol. 29No. 1
We develop the hypothesis that an individual can get some value of information, even ifthey do not use the information for his subsequent decision, contrary to the expected utilitytheory. Curiosity is associated with the direct utility from information and is definedformally by using the concept of entropy. We can measure an agent's curiosity level by themaximum amount of money that he is willing to pay in order to obtain the informationthereby reducing the entropy. We test the hypothesis from lab experiments and obtain theempirical evidence that people are actually willing to pay a positive amount of money toobtain payoff-irrelevant information. Also, the comparison of the coefficients of variationfor our curiosity measure and the IPI (Imaginal Processes Inventory) curiosity measurewhich is widely used in psychology suggests that our measure is more informative.