Rational Inattention, Optimal Consideration Sets, and Stochastic Choice

S-Tier
Journal: Review of Economic Studies
Year: 2019
Volume: 86
Issue: 3
Pages: 1061-1094

Authors (3)

Andrew Caplin (not in RePEc) Mark Dean (not in RePEc) John Leahy

Score contribution per author:

2.681 = (α=2.01 / 3 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We unite two basic approaches to modelling limited attention in choice by showing that the rational inattention model implies the formation of consideration sets—only a subset of the available alternatives will be considered for choice. We provide necessary and sufficient conditions for rationally inattentive behaviour which allow the identification of consideration sets. In simple settings, chosen options are those that are best on a stand-alone basis. In richer settings, the consideration set can only be identified holistically. In addition to payoffs, prior beliefs impact consideration sets. Linear inequalities identify all priors consistent with each possible consideration set.

Technical Details

RePEc Handle
repec:oup:restud:v:86:y:2019:i:3:p:1061-1094.
Journal Field
General
Author Count
3
Added to Database
2026-01-25