 Inattention and belief polarizationKristoffer Nimark () and Savitar Sundaresan Journal of Economic Theory, 2019, vol. 180, issue C, 203-228 Abstract: Disagreement persists over issues that have objective truths. In the presence of increasing amounts of data, such disagreement should vanish, but it is nonetheless observable. This paper studies persistent disagreement in a model where rational Bayesian agents learn about an unobservable state of the world through noisy signals. We show that agents (i) choose signal structures that are more likely to reinforce their prior beliefs and (ii) choose less informative signals when their prior beliefs are more precise. For sufficiently precise beliefs, agents choose completely uninformative signals. We call the former the confirmation effect and the latter the complacency effect. Taken together, the two effects imply that the beliefs of ex ante identical agents over time can cluster in two distinct groups at opposite ends of the belief space. The complacency effect holds uniformly when information cost is proportional to channel capacity, but not when cost is proportional to reduction in entropy. Keywords: Rational inattention; Beliefs; Disagreement; Rational Bayesian agents; Filter bubbles; Polarization (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:180:y:2019:i:c:p:203-228 DOI: 10.1016/j.jet.2018.12.007 Access Statistics for this article Journal of Economic Theory is currently edited by A. Lizzeri and K. Shell More articles in Journal of Economic Theory from Elsevier |
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