Rational inattentiveness in a forecasting experiment
Research output: Contribution to journal › Article › peer-review
While standard theory assumes rational, optimizing agents under full information, the latter is rarely found in reality. Information has to be acquired and processed—both involving costs. In rational-inattentiveness models agents update their information set only when the benefit outweighs the information cost. We test the rational-inattentiveness model in a controlled laboratory environment. Our design is a forecasting task with costly information and a clear cost–benefit structure. While we find numerous deviations from the model predictions on the individual level, the aggregate results are consistent with rational-inattentiveness and sticky information models rejecting simpler behavioral heuristics.
| Original language | English |
|---|---|
| Pages (from-to) | 80-89 |
| Journal | Journal of Economic Behavior & Organization |
| Volume | 94 |
| Early online date | 3 Sep 2013 |
| DOIs | |
| Publication status | Published - 1 Oct 2013 |
Documents
- LUHAN_2013_cright_JEBO_Rational inattentiveness in a forecasting experiment
Rights statement: NOTICE: this is the author’s version of a work that was accepted for publication in Journal of Economic Behavior and Organization. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Economic Behavior and Organization, 94, (2013), DOI: 10.1016/j.jebo.2013.08.013
Accepted author manuscript (Post-print), 832 KB, PDF document
Licence: CC BY-NC-ND
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