George Loewenstein

Recommender Systems and the New New Economics of Information

by George Loewenstein (Carnegie Mellon University, USA)

George Stigler pioneered the economics of information in the 1960s with his observation that information is a scarce and valuable commodity. Stigler assumed people value information to the extent, and only to the extent, that it helps them to make better decisions, and that people update their beliefs rationally, in response to new information. Stigler won the Nobel prize for his contibution, as did three economists, George Akerlof, Michael Spence and Joseph Stiglitz ten years later. This second wave of research, that came to be called the “new economics of information” adhered to Stigler’s assumptions, but examined consequences of asymmetric information – i.e., the fact that interacting individuals often possess different information sets. In this talk I will discuss my research on four phenomena that are key to the information age that don’t fit neatly into either wave of economic research on information: curiosity (the desire for information for its own sake), privacy (the desire to withhold information), information avoidance, and the desire to share information. The last of these topics is most relevant to recommender systems, so I will devote special attention to it.

About the Speaker

George Loewenstein is the Herbert A. Simon University Professor of Economics and Psychology at Carnegie Mellon University. He received his PhD in economics from Yale University in 1985 and since then has held academic positions at The University of Chicago and Carnegie Mellon University, and fellowships at Center for Advanced Study in the Behavioral Sciences, The Institute for Advanced Study in Princeton, The Russell Sage Foundation, The Institute for Advanced Study (Wissenschaftskolleg) in Berlin, and the London School of Economics. His research focuses on applications of psychology to economics, and his specific interests include decision making over time, bargaining and negotiations, psychology and health, privacy, curiosity, information avoidance, law and economics, the psychology of adaptation, the role of emotion in decision making, the psychology of curiosity, conflict of interest, and “out of control” behaviors such as impulsive violent crime and drug addiction. He is one of the founders of the fields of behavioral economics and neuroeconomics.

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