IDEAS home Printed from https://ideas.repec.org/a/eee/gamebe/v133y2022icp170-180.html
   My bibliography  Save this article

Optimal attention management: A tractable framework

Author

Listed:
  • Lipnowski, Elliot
  • Mathevet, Laurent
  • Wei, Dong

Abstract

A well-intentioned principal provides information to a rationally inattentive agent without internalizing the agent's cost of processing information. Whatever information the principal makes available, the agent may choose to ignore some. We study optimal information provision in a tractable model with quadratic payoffs where full disclosure is not optimal. We characterize incentive-compatible information policies, that is, those to which the agent willingly pays full attention. In a leading example with three states, optimal disclosure involves information distortion at intermediate costs of attention. As the cost increases, optimal information changes from downplaying the state to exaggerating the state.

Suggested Citation

  • Lipnowski, Elliot & Mathevet, Laurent & Wei, Dong, 2022. "Optimal attention management: A tractable framework," Games and Economic Behavior, Elsevier, vol. 133(C), pages 170-180.
    • Handle: RePEc:eee:gamebe:v:133:y:2022:i:c:p:170-180
    DOI: 10.1016/j.geb.2022.01.029
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S089982562200046X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.geb.2022.01.029?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Dezsö Szalay, 2005. "The Economics of Clear Advice and Extreme Options," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 1173-1198.
    2. Benjamin Lester & Nicola Persico & Ludo Visschers, 2012. "Information Acquisition and the Exclusion of Evidence in Trials," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 28(1), pages 163-182.
    3. Emir Kamenica & Matthew Gentzkow, 2011. "Bayesian Persuasion," American Economic Review, American Economic Association, vol. 101(6), pages 2590-2615, October.
    4. Wei, Dong, 2021. "Persuasion under costly learning," Journal of Mathematical Economics, Elsevier, vol. 94(C).
    5. Jeffrey Ely & Alexander Frankel & Emir Kamenica, 2015. "Suspense and Surprise," Journal of Political Economy, University of Chicago Press, vol. 123(1), pages 215-260.
    6. Elliot Lipnowski & Laurent Mathevet & Dong Wei, 2020. "Attention Management," American Economic Review: Insights, American Economic Association, vol. 2(1), pages 17-32, March.
    7. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
    8. Herbert A. Simon, 1996. "The Sciences of the Artificial, 3rd Edition," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691914, April.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wei, Dong, 2021. "Persuasion under costly learning," Journal of Mathematical Economics, Elsevier, vol. 94(C).
    2. Matveenko, Andrei & Mikhalishchev, Sergei, 2021. "Attentional role of quota implementation," Journal of Economic Theory, Elsevier, vol. 198(C).
    3. Matysková, Ludmila & Montes, Alfonso, 2023. "Bayesian persuasion with costly information acquisition," Journal of Economic Theory, Elsevier, vol. 211(C).
    4. Terstiege, Stefan & Wasser, Cédric, 2020. "Buyer-optimal extensionproof information," Journal of Economic Theory, Elsevier, vol. 188(C).
    5. Tsakas, Elias & Tsakas, Nikolas, 2021. "Noisy persuasion," Games and Economic Behavior, Elsevier, vol. 130(C), pages 44-61.
    6. Xiaoyu Cheng, 2020. "Ambiguous Persuasion: An Ex-Ante Formulation," Papers 2010.05376, arXiv.org, revised Nov 2023.
    7. Itai Arieli & Yakov Babichenko & Fedor Sandomirskiy, 2022. "Bayesian Persuasion with Mediators," Papers 2203.04285, arXiv.org, revised Sep 2022.
    8. Emir Kamenica & Kyungmin Kim & Andriy Zapechelnyuk, 2021. "Bayesian persuasion and information design: perspectives and open issues," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(3), pages 701-704, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Matysková, Ludmila & Montes, Alfonso, 2023. "Bayesian persuasion with costly information acquisition," Journal of Economic Theory, Elsevier, vol. 211(C).
    2. Takashi Ui, 2022. "Optimal and Robust Disclosure of Public Information," Papers 2203.16809, arXiv.org, revised Apr 2022.
    3. Wei, Dong, 2021. "Persuasion under costly learning," Journal of Mathematical Economics, Elsevier, vol. 94(C).
    4. Takashi Ui, 2022. "Optimal and Robust Disclosure of Public Information," Working Papers on Central Bank Communication 039, University of Tokyo, Graduate School of Economics.
    5. Bartosz Maćkowiak & Filip Matějka & Mirko Wiederholt, 2023. "Rational Inattention: A Review," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 226-273, March.
    6. Mensch, Jeffrey, 2021. "Rational inattention and the monotone likelihood ratio property," Journal of Economic Theory, Elsevier, vol. 196(C).
    7. Kim, Kyungmin & Koh, Youngwoo, 2022. "Auctions with flexible information acquisition," Games and Economic Behavior, Elsevier, vol. 133(C), pages 256-281.
    8. Dirk Bergemann & Stephen Morris, 2019. "Information Design: A Unified Perspective," Journal of Economic Literature, American Economic Association, vol. 57(1), pages 44-95, March.
    9. Vladimir Asriyan & Dana Foarta & Victoria Vanasco, 2023. "The Good, the Bad, and the Complex: Product Design with Imperfect Information," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 187-226, May.
    10. Beg, Sabrin & Islam, Mahnaz & Rahman, Khandker Wahedur, 2024. "Information and behavior: Evidence from fertilizer quantity recommendations in Bangladesh," Journal of Development Economics, Elsevier, vol. 166(C).
    11. Cheng, Ing-Haw & Hsiaw, Alice, 2022. "Distrust in experts and the origins of disagreement," Journal of Economic Theory, Elsevier, vol. 200(C).
    12. Meng, Delong & Wang, Siyu, 2024. "Impact of open-mindedness on information avoidance: Tailored vs. generic communication," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 108(C).
    13. Szalay, Dezső & Deimen, Inga, 2015. "Information, authority, and smooth communication in organizations," CEPR Discussion Papers 10969, C.E.P.R. Discussion Papers.
    14. Lin, Yi-Hsuan, 2022. "Stochastic choice and rational inattention," Journal of Economic Theory, Elsevier, vol. 202(C).
    15. Alaoui, Larbi & Germano, Fabrizio, 2020. "Time scarcity and the market for news," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 173-195.
    16. Negrelli, Sara, 2020. "Bubbles and persuasion with uncertainty over market sentiment," Games and Economic Behavior, Elsevier, vol. 120(C), pages 67-85.
    17. Tsakas, Elias & Tsakas, Nikolas, 2021. "Noisy persuasion," Games and Economic Behavior, Elsevier, vol. 130(C), pages 44-61.
    18. Roc Armenter & Michèle Müller-Itten & Zachary Stangebye, 2020. "Rational Inattention via Ignorance Equivalence," Working Papers 20-24, Federal Reserve Bank of Philadelphia.
    19. Deimen, Inga & Szalay, Dezsö, 2014. "A Smooth, strategic communication," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 479, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    20. Hobler, Stephan, 2022. "Multi-layered rational inattention and time-varying volatility," Journal of Economic Dynamics and Control, Elsevier, vol. 138(C).

    More about this item

    Keywords

    Information disclosure; Rational inattention; Costly information processing; Paternalistic information design;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • 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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:gamebe:v:133:y:2022:i:c:p:170-180. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.