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Inferring Cognitive Heterogeneity from Aggregate Choices

Author

Listed:
  • Valentino Dardanoni

    (Università degli Studi di Palermo, Italy)

  • Paola Manzini

    () (University of Sussex, Falmer, UK
    IZA (Institute of Labour Economics), Bonn, Germany)

  • Marco Mariotti

    (Queen Mary University of London, UK)

  • Christopher J. Tyson

    (Queen Mary University of London, UK)

Abstract

One potentially important drawback of existing theories of limited attention is that they typically assume a rich dataset of choices from many menus. We study the problem of identifying the distribution of cognitive characteristics in a population of agents when only aggregate choice behavior from a single menu is observable. We show how both “consideration probability” and “consideration capacity” distributions can be substantially identified by aggregate choice shares. We also suggest how to embed the attention models in an econometric specification of the inference problem. Finally, we sucessfully use our results to recover the true parameters in Monte Carlo simulations of both models.

Suggested Citation

  • Valentino Dardanoni & Paola Manzini & Marco Mariotti & Christopher J. Tyson, 2018. "Inferring Cognitive Heterogeneity from Aggregate Choices," Working Paper Series 1018, Department of Economics, University of Sussex Business School.
  • Handle: RePEc:sus:susewp:1018
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    References listed on IDEAS

    as
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    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Francesco Cerigioni, 2016. "Dual Decision Processes: Retrieving Preferences when some Choices are Automatic," Working Papers 924, Barcelona Graduate School of Economics.
    2. Victor H. Aguiar & Nail Kashaev, 2019. "Discrete Choice and Welfare Analysis with Unobserved Choice Sets," Papers 1907.04853, arXiv.org, revised Jul 2019.
    3. Levon Barseghyan & Francesca Molinari & Matthew Thirkettle, 2019. "Discrete choice under risk with limited consideration," CeMMAP working papers CWP08/19, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.

    More about this item

    Keywords

    attention; bounded rationality; consideration set; stochastic choice;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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