The allocation of attention: theory and evidence

Xavier Gabaix, David Laibson, Guillermo Moloche and Weinberg Stephen

MPRA Paper from University Library of Munich, Germany

Abstract: A host of recent studies show that attention allocation has important economic consequences. This paper reports the first empirical test of a cost-benefit model of the endogenous allocation of attention. The model assumes that economic agents have finite mental processing speeds and cannot analyze all of the elements in complex problems. The model makes tractable predictions about attention allocation, despite the high level of complexity in our environment. The model successfully predicts the key empirical regularities of attention allocation measured in a choice experiment. In the experiment, decision time is a scarce resource and attention allocation is continuously measured using Mouselab. Subject choices correspond well to the quantitative predictions of the model, which are derived from cost-benefit and option-value principles.

Keywords: attention; satisficing; Mouselab (search for similar items in EconPapers)
JEL-codes: C7 C9 D8 (search for similar items in EconPapers)
Date: 2003-08-29
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (35)

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:47339

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