Rational Inattention, Competitive Supply, and Psychometrics
We introduce a simple method of recovering attention costs from choice data. Our method rests on a precise analogy with production theory. Costs of attention determine consumer demand and consumer welfare just as a competitive firm's technology determines its supply curve and profits. We implement our recovery method experimentally, outline applications, and link our work to the broader literature on inattention and mistaken decisions.
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Copy CitationAndrew Caplin, Dániel Csaba, John Leahy, and Oded Nov, "Rational Inattention, Competitive Supply, and Psychometrics," NBER Working Paper 25224 (2018), https://doi.org/10.3386/w25224.
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Published Versions
Andrew Caplin & Dániel Csaba & John Leahy & Oded Nov, 2020. "Rational Inattention, Competitive Supply, and Psychometrics*," The Quarterly Journal of Economics, vol 135(3), pages 1681-1724. citation courtesy of 
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