Discussion paper
DP18875 Rational Inattention during an RCT
We show what the rational inattention model predicts about the treatment effect of information provided during a randomized control trial. This is a non-trivial question because the model implies optimal attention choice before, during, and after an information treatment. The predictions of the model are consistent with a negative relationship between the level of inflation and the magnitude of information treatment effects found in surveys across countries and time: when inflation is high, people respond less to provided information about inflation.
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