منابع مشابه
Rational Inattention to Discrete Choices: A New Foundation for the Multinomial Logit Model†‡
Individuals must often choose among discrete actions with imperfect information about their payoffs. Before choosing, they have an opportunity to study the payoffs, but doing so is costly. This creates new choices such as the number of and types of questions to ask. We model these situations using the rational inattention approach to information frictions. We find that the decision maker’s opti...
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In this paper we examine the implications of two theories of informational frictions, signal extraction (SE) and rational inattention (RI), for optimal decisions and economic dynamics within the linear-quadratic-Gaussian (LQG) setting. We first show that if the variance of the noise and channel capacity are fixed exogenously in the SE and RI problems, respectively, the two environments lead to ...
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We study information acquisition in a coordination game with incomplete information. To capture the idea that players can exibly decide what information to acquire, we do not impose any physical restriction on feasible information structure. Facing an informational cost measured by reduction of Shannon's entropy, players collect information most relevant to their welfare and are rationally inat...
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This paper introduces the rational inattention hypothesis (RI) – that agents process information subject to finite channel constraints – into a stochastic growth model with permanent technology shocks. We find that RI raises consumption volatility relative to output by introducing an endogenous demand shock. Furthermore, it is shown that incorporating RI can provide an additional internal propa...
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• Another alternative – and this is the one that rational inattention chooses – is to model agents as having only a probability distribution over the true state of the world, instead of knowing the state of the world with certainty. For instance, imagine looking at a thermometer or yourwatch:While being – inmost cases, at least – highly correlated with the actual temperature or time, respective...
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ژورنال
عنوان ژورنال: Economics Letters
سال: 2020
ISSN: 0165-1765
DOI: 10.1016/j.econlet.2019.108537