Discussion paper

DP18875 Rational Inattention during an RCT

We introduce an information provision experiment into a standard dynamic rational inattention model. We derive analytical results about how the treatment effect varies with characteristics of the environment and the individual. We use these results to discuss findings in the empirical literature on information provision experiments that can be explained by rational inattention of survey respondents and what this interpretation implies about behavior outside the survey.

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Citation

Mackowiak, B and M Wiederholt (2024), ‘DP18875 Rational Inattention during an RCT‘, CEPR Discussion Paper No. 18875. CEPR Press, Paris & London. https://cepr.org/publications/dp18875