Rational Inattention, Competitive Supply, and Psychometrics
We introduce a simple method of recovering attention costs from choice data. Our method rests on a precise analogy with production theory. Costs of attention determine consumer demand and consumer welfare just as a competitive firm's technology determines its supply curve and profits. We implement our recovery method experimentally, outline applications, and link our work to the broader literature on inattention and mistaken decisions.
Published Versions
Andrew Caplin & Dániel Csaba & John Leahy & Oded Nov, 2020. "Rational Inattention, Competitive Supply, and Psychometrics*," The Quarterly Journal of Economics, vol 135(3), pages 1681-1724. citation courtesy of 
More from NBER
In addition to working papers, the NBER disseminates affiliates’ latest findings through a range of free periodicals — the NBER Reporter, the NBER Digest, the Bulletin on Retirement and Disability, the Bulletin on Health, and the Bulletin on Entrepreneurship — as well as online conference reports, video lectures, and interviews.
