There is an error in our 2004 paper "Wealth, Information Acquisition and Portfolio Choice". This note shows how to correct it by adjusting the hypotheses of the model. Specifically, it assumes that agents learn about the stock's mean payoff rather than about its realization. All the conclusions of the paper remain valid.There is a mistake in the derivation of agents' unconditional expected utility in "Wealth, Information Acquisition and Portfolio Choice" {Review of Finan-cial Studies, 17(3) (2004), pages 879-914). Some formulas need to be corrected and some assumptions adjusted, but all the conclusions of the paper remain valid. In particular, it remains the case that wealthier investors collect more information and that, as a result, they hold a larger fraction of their wealth in stocks even though their relative risk aversion is not lower.
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