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Applied Micro Workshop – Mark Dean, “Experimental Tests of Rational Inattention”

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Mark Dean and Nathaniel Neligh: “Experimental Tests of Rational Inattention” We use laboratory experiments to test models of ‘rational inattention’, in which people acquire information to maximize utility net of information costs. We show that subjects adjust their attention in response to changes in incentives in line with the rational inattention model. However, our results are qualitatively inconsistent with information costs based on Shannon entropy, as is often assumed in applied work. Our data is best fit by a generalization of the Shannon model which allows for a more flexible response to incentives and for some states of the world to be harder to distinguish than others.

Event details
What
  • Presentation
When Nov 26, 2019
from 16:00 to 17:30
Where briq, Seminar Room 9/1.1, Schaumburg-Lippe-Straße 9
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