%0 Journal Article
%T Effectiveness of Signal Precision and Risky Choice
%A Weiqi Liu
%A Huan Liu
%J Theoretical Economics Letters
%P 381-390
%@ 2162-2086
%D 2021
%I Scientific Research Publishing
%R 10.4236/tel.2021.112025
%X Higher signal precision helps to predict returns
more accurately. But higher signal precision requires higher more costs and
longer time. The acquisition of higher precision signals has two opposite
effects for investors. First, the <span style=\"font-family:Verdana;\">higher
precision helps with return forecast. Second, the longer processing</span><span style=\"font-family:Verdana;\"> time
is a disadvantage for decision making. We build a rational expected model under
the assumption that the longer processing time takes, the higher the signal
precision. The results show that higher signal precision is not always </span><span style=\"font-family:Verdana;\">better after considering signal processing time.
There is an optimal signal</span><span style=\"font-family:Verdana;\"> waiting time for investors.</span>
%K Risk Choice
%K Signal Precision
%K Rational Expectation
%K Information Acquisition
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=108805