The Unicredit and Universities Foundation awarded TI PhD students Rei Sayag and Pedro Robalo the first prize for their outstanding joint paper entitled “Paying is Believing: The Effect of Costly Information on Bayesian Updating.” Sayag and Robalo won the Best Paper Award Labor Economics competition and a prize of € 2.000. Their award winning paper examines the assumption that people find it difficult to use new information well in uncertainty-ridden environments. Sayag and Robalo used a laboratory experiment to examine whether making information costly can affect decision making under risk. Their results show that people rely on information they are charged for more than on identical information they obtain for free. In the parlance of Bayesian updating, signals that are costly receive a higher weight that signals that are costless. These results suggest straightforward policy implications for information pricing: if decision makers are not using new information to the amount prescribed by the (Bayesian) normative benchmark, charging for new information will tend to correct this shortcoming. Pedro Robalo will present this paper at the workshop on the same topic to be held at IZA, Bonn on June 17-18, 2013. Robalo is a PhD student and member of TI’s Behavioral and Experimental Economics (BEE) Research Group. Sayag is a PhD student and member of TI’s Organizations and Markets (OM) Research Group.