Revealed Preference, Rational Inattention, and Costly Information Acquisition
Apparently mistaken decisions are ubiquitous. To what extent does this reflect irrationality, as opposed to a rational trade-off between the costs of information acquisition and the expected benefits of learning? We develop a revealed preference test that characterizes all patterns of choice "m...
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| Veröffentlicht in: | The American economic review 2015-07, Vol.105 (7), p.2183-2203 |
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| container_title | The American economic review |
| container_volume | 105 |
| creator | Caplin, Andrew Dean, Mark |
| description | Apparently mistaken decisions are ubiquitous. To what extent does this reflect irrationality, as opposed to a rational trade-off between the costs of information acquisition and the expected benefits of learning? We develop a revealed preference test that characterizes all patterns of choice "mistakes" consistent with a general model of optimal costly information acquisition and identify the extent to which information costs can be recovered from choice data. |
| doi_str_mv | 10.1257/aer.20140117 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0002-8282 |
| ispartof | The American economic review, 2015-07, Vol.105 (7), p.2183-2203 |
| issn | 0002-8282 1944-7981 |
| language | eng |
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| source | EBSCOhost Business Source Complete; JSTOR Archive Collection A-Z Listing; American Economic Association Web |
| subjects | Acquisition costs Acquisitions Acquisitions & mergers Behavior Cost functions Cost structure Costs Data collection Datasets Decision making Economic analysis Economic models Economic theory Expected utility Information Information representations Learning Observed choices Preferences Probability Rational choice theory Studies Time Utilities costs Utility functions |
| title | Revealed Preference, Rational Inattention, and Costly Information Acquisition |
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