NYU Tandon School of Engineering
6 MetroTech Center
Brooklyn, NY 11201
Institutional Affiliation: New York University
NBER Working Papers and Publications
|November 2018||Rational Inattention, Competitive Supply, and Psychometrics|
with , , : w25224
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.