Inferring Cognitive Heterogeneity from Aggregate Choices

Valentino Dardanoni (), Paola Manzini, Marco Mariotti and Christopher Tyson

Working Paper Series from Department of Economics, University of Sussex Business School

Abstract: One potentially important drawback of existing theories of limited attention is that they typically assume a rich dataset of choices from many menus. We study the problem of identifying the distribution of cognitive characteristics in a population of agents when only aggregate choice behavior from a single menu is observable. We show how both “consideration probability” and “consideration capacity” distributions can be substantially identified by aggregate choice shares. We also suggest how to embed the attention models in an econometric specification of the inference problem. Finally, we sucessfully use our results to recover the true parameters in Monte Carlo simulations of both models.

Keywords: attention; bounded rationality; consideration set; stochastic choice (search for similar items in EconPapers)
JEL-codes: D01 D12 D91 (search for similar items in EconPapers)
Date: 2018-05
New Economics Papers: this item is included in nep-neu, nep-ore and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:sus:susewp:1018

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