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/lp/association-for-computing-machinery/intro-to-informational-substitutes-APjBrvS0nj
- Publisher
- Association for Computing Machinery
- Copyright
- Copyright © 2017 by ACM Inc.
- ISSN
- 1551-9031
- DOI
- 10.1145/3144722.3144727
- Publisher site
- See Article on Publisher Site
Abstract
Intro to Informational Substitutes YILING CHEN Harvard University and BO WAGGONER University of Pennsylvania We propose de nitions for when signals are œsubstitutes and œcomplements . These give a characterization of equilibria of prediction markets and are relevant to the complexity of information acquisition under constraints. Categories and Subject Descriptors: F.2.0 [Theory of Computation]: Analysis of Algorithms and Problem Complexity General Terms: Economics, Algorithms, Theory Additional Key Words and Phrases: Prediction markets, Value of information, Information acquisition, Signals, Substitutes, Complements. 1. DEFINING INFORMATIONAL SUBSTITUTES AND COMPLEMENTS The goal of Informational Substitutes [Chen and Waggoner 2016] is to raise the question: When should we consider a set of pieces of information to be œsubstitutes or œcomplements , and how can such de nitions be useful? The key intuition for œsubstitutes that we hope to leverage here is diminishing marginal value: A1 and A2 are œsubstitutes if having either one makes the other less desirable.1 But while it is understood how to model substitutable items, new challenges are raised by information. How do we model œinformation at all? Where does the œvalue of information come from? What is a œmarginal unit of information,
Journal
ACM SIGecom Exchanges – Association for Computing Machinery
Published: Sep 25, 2017