Rational Inattention, Competitive Supply, and Psychometrics

Andrew Caplin, Dániel Csaba, John Leahy, Oded Nov

Research output: Contribution to journalArticlepeer-review


We introduce a simple method of recovering attention costs from choice data. Our method rests on a precise analogy with production theory. Costs of attention determine consumer demand and consumer welfare, just as a competitive firm's technology determines its supply curve and profits. We implement our recovery method experimentally, outline applications, and link our work to the broader literature on inattention and mistaken decisions.

Original languageEnglish (US)
Pages (from-to)1681-1724
Number of pages44
JournalQuarterly Journal of Economics
Issue number3
StatePublished - Aug 1 2020

ASJC Scopus subject areas

  • Economics and Econometrics


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