Rational inattention and revealed preference: The data-theoretic approach to economic modeling

Andrew Caplin

Research in Economics, 2014, vol. 68, issue 4, 295-305

Abstract: Beliefs have as pervasive a role as utility functions in economic models of choice, and are no more visible to the naked eye. This suggests the value of a data-theoretic approach to imperfect information along the lines of Samuelson's “revealed preference” approach to utility maximization. I introduce a recently developed approach of this nature (Caplin and Martin, 2013a; Caplin and Dean, 2013a, 2013b). I highlight the broader potential of the data-theoretic approach to answer questions of an inter-disciplinary nature and to discipline an oncoming flood of behaviorally-relevant data.

Keywords: Revealed preference; Rational inattention; Bayesian updating; Behavioral economics (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:68:y:2014:i:4:p:295-305

DOI: 10.1016/j.rie.2013.09.001

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