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Behavioral Inattention

Xavier Gabaix

No 24096, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Inattention is a central, unifying theme for much of behavioral economics. It permeates such disparate fields as microeconomics, macroeconomics, finance, public economics, and industrial organization. It enables us to think in a rather consistent way about behavioral biases, speculate about their origins, and trace out their implications for market outcomes. This survey first discusses the most basic models of attention, using a fairly unified framework. Then, it discusses the methods used to measure attention, which present a number of challenges on which a great deal of progress has been achieved, although much more work needs to be done. It then examines the various theories of attention, both behavioral and more Bayesian. It finally discusses some applications. For instance, inattention offers a way to write a behavioral version of basic microeconomics, as in consumer theory and Arrow-Debreu. A last section is devoted to open questions in the attention literature. This chapter is a pedagogical guide to the literature on attention. Derivations are self-contained.

JEL-codes: D03 D11 D51 E03 G02 H2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-evo, nep-ltv, nep-mac, nep-mic, nep-pke and nep-upt
Date: 2017-12
Note: AG DEV EFG LE PE
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Working Paper: Behavioral Inattention (2018) Downloads
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