Information avoidance and overvaluation under epistemic constraints: Principles and implications for regulatory policies

The Value of Information (VoI) assesses the impact of data in a decision process. A risk-neutral agent, quantifying the VoI in monetary terms, prefers to collect data only if their VoI surpasses the cost to collect them. For an agent acting without external constraints, data have non-negative VoI (as free “information cannot hurt”) and those with an almost-negligible potential effect on the agent's belief have an almost-negligible VoI. However,...