Rational Attention and Adaptive Coding: A Puzzle and a Solution

Camillo Padoa-Schioppa and Aldo Rustichini

American Economic Review, 2014, vol. 104, issue 5, 507-13

Abstract: Adaptive Coding is the property of the brain to adjust its response to statistical properties of the environment. Its effect is an improved discrimination among signals under the constraints on the dynamic range of its response. It can thus be considered the neural correspondent of Rational Attention, which models how a rational decisionmaker allocates attention among different informative signals. There is strong evidence of existence of widespread adaptive coding. Adaptive coding introduces a dependence of choice from the environment which is not observed in behavior. We discuss potential solutions and propose Hebbian learning as a potentially satisfactory answer.

JEL-codes: D12 D82 D83 D87 (search for similar items in EconPapers)
Date: 2014
Note: DOI: 10.1257/aer.104.5.507
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Citations: View citations in EconPapers (14)

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