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Rational Inattention in the Infield

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  • Vivek Bhattacharya
  • Greg Howard

Abstract

This paper provides evidence of rational inattention by experienced professionals in strategic interactions. We add rational inattention to a game of matching pennies with state-dependent payoffs. Unlike the full-information, mixed-strategy Nash equilibrium, payoffs of different actions need not be equated state by state. Moreover, players respond partially to payoff differences, this responsiveness is stronger when attention costs are lower, strategies converge to full-information Nash as stakes increase, and average payoffs across all states are approximately equal across actions. We test these predictions using data on millions of pitches from Major League Baseball, where we observe strategies, payoffs, and proxies for attention costs.

Suggested Citation

  • Vivek Bhattacharya & Greg Howard, 2022. "Rational Inattention in the Infield," American Economic Journal: Microeconomics, American Economic Association, vol. 14(4), pages 348-393, November.
    • Handle: RePEc:aea:aejmic:v:14:y:2022:i:4:p:348-93
    DOI: 10.1257/mic.20200310
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    References listed on IDEAS

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    1. Kenneth Kovash & Steven D. Levitt, 2009. "Professionals Do Not Play Minimax: Evidence from Major League Baseball and the National Football League," NBER Working Papers 15347, National Bureau of Economic Research, Inc.
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    Cited by:

    1. David Almog & Romain Gauriot & Lionel Page & Daniel Martin, 2024. "AI Oversight and Human Mistakes: Evidence from Centre Court," Papers 2401.16754, arXiv.org, revised Feb 2024.

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    More about this item

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Z21 - Other Special Topics - - Sports Economics - - - Industry Studies

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