Rational Inattention during an RCT

Bartosz Maćkowiak and Mirko Wiederholt

No 18875, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We show what the rational inattention model predicts about the treatment effect of information provided during a randomized control trial. This is a non-trivial question because the model implies optimal attention choice before, during, and after an information treatment. The predictions of the model are consistent with a negative relationship between the level of inflation and the magnitude of information treatment effects found in surveys across countries and time: when inflation is high, people respond less to provided information about inflation.

JEL-codes: D8 E3 E7 (search for similar items in EconPapers)
Date: 2024-03
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