Rational inattention and revealed preference: The data-theoretic approach to economic modeling

Andrew Caplin

    Research output: Contribution to journalArticle

    Abstract

    Beliefs have as pervasive a role as utility functions in economic models of choice, and are no more visible to the naked eye. This suggests the value of a data-theoretic approach to imperfect information along the lines of Samuelson's "revealed preference" approach to utility maximization. I introduce a recently developed approach of this nature (Caplin and Martin, 2013a; Caplin and Dean, 2013a, 2013b). I highlight the broader potential of the data-theoretic approach to answer questions of an inter-disciplinary nature and to discipline an oncoming flood of behaviorally-relevant data.

    Original languageEnglish (US)
    Pages (from-to)295-305
    Number of pages11
    JournalResearch in Economics
    Volume68
    Issue number4
    DOIs
    StatePublished - Jan 1 2014

    Keywords

    • Bayesian updating
    • Behavioral economics
    • Rational inattention
    • Revealed preference

    ASJC Scopus subject areas

    • Economics and Econometrics

    Fingerprint Dive into the research topics of 'Rational inattention and revealed preference: The data-theoretic approach to economic modeling'. Together they form a unique fingerprint.

  • Cite this