Knowledge Acquisition in a High-Stakes Environment: Evidence from the Covid-19 Pandemic

We measure Covid-19 knowledge at the onset of the pandemic. Information acquisition models predict that the precision of information increases in the benefits of improved decisionmaking and decreases in the costs of acquiring information. Indeed, we find that individuals with lower information costs are more informed, and that the benefits of information (proxied by mortality risk) predict information acquisition. High-risk individuals’ knowledge is initially lower, but converges, albeit slowly, to that of low-risk individuals within 43 days. These findings highlight the importance of information cost heterogeneity and suggest a role for policies that increase information access for high-cost, high-benefit groups. JEL codes: D83, I12