@article{2e7bf1a5b5e049c5a5d35ec5b889b3d5,
title = "Rational inattention, optimal consideration sets, and stochastic choice",
abstract = "We unite two basic approaches to modelling limited attention in choice by showing that the rational inattention model implies the formation of consideration sets—only a subset of the available alternatives will be considered for choice. We provide necessary and sufficient conditions for rationally inattentive behaviour which allow the identification of consideration sets. In simple settings, chosen options are those that are best on a stand-alone basis. In richer settings, the consideration set can only be identified holistically. In addition to payoffs, prior beliefs impact consideration sets. Linear inequalities identify all priors consistent with each possible consideration set.",
keywords = "Consideration, Limited attention, Sets, Shannon Mutual Information",
author = "Andrew Caplin and Mark Dean and John Leahy",
note = "Funding Information: Acknowledgments. We thank Dirk Bergemann, Henrique de Oliveira, Xavier Gabaix, Sen Geng, Andrei Gomberg, Daniel Martin, Filip Matejka, Alisdair McKay, Stephen Morris, Dan Silverman, and Michael Woodford for their constructive contributions. Andrew Caplin thanks the Sloan Foundation and Nomis Foundation for supporting this research as part of the Program on the Attentional and Perceptual Foundations of Economic Behaviour (https://wp.nyu.edu/sloan_nomis_project/). This article develops some of the concepts of Caplin and Dean (2013) and subsumes those parts of that article that are common. Funding Information: We thank Dirk Bergemann, Henrique de Oliveira, Xavier Gabaix, Sen Geng, Andrei Gomberg, Daniel Martin, Filip Matejka, Alisdair McKay, Stephen Morris, Dan Silverman, and Michael Woodford for their constructive contributions. Andrew Caplin thanks the Sloan Foundation and Nomis Foundation for supporting this research as part of the Program on the Attentional and Perceptual Foundations of Economic Behaviour (https://wp.nyu.edu/sloan_nomis_project/). This article develops some of the concepts of Caplin and Dean (2013) and subsumes those parts of that article that are common. Publisher Copyright: {\textcopyright} The Author(s) 2018.",
year = "2019",
month = may,
day = "1",
doi = "10.1093/restud/rdy037",
language = "English (US)",
volume = "86",
pages = "1061--1094",
journal = "Review of Economic Studies",
issn = "0034-6527",
publisher = "Oxford University Press",
number = "3",
}