Imperfect Attention and Menu Evaluation
We model the choice behaviour of an agent who is vNM rational but imperfectly attentive. We define inattention axiomatically through preference over menus and endowed alternatives: an agent is inattentive if it is better to be endowed with an alternative a than to be allowed to pick a from a menu in which a is is the best alternative. This property and vNM rationality imply that the agent notices each alternative with a given menu-dependent probability (attention parameter) and maximises a menu independent and deterministic utility function over the alternatives he notices. Preference for flexibility restricts the model to menu independent attention parameters as in Manzini and Mariotti (2014). Our theory explains anomalies (e.g. the attraction and compromise effect) that Random Utility Maximisation cannot accommodate.
|Date of creation:||21 Oct 2013|
|Date of revision:||24 Aug 2014|
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