DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT

Research output: Contribution to journal › Journal article › Research › peer-review

Standard

DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT. / Fosgerau, Mogens; Melo, Emerson; De Palma, Andre; Shum, Matthew.

In: International Economic Review, Vol. 61, No. 4, 16.06.2020, p. 1569-1589.

Research output: Contribution to journal › Journal article › Research › peer-review

Harvard

Fosgerau, M, Melo, E, De Palma, A & Shum, M 2020, 'DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT', International Economic Review, vol. 61, no. 4, pp. 1569-1589. https://doi.org/10.1111/iere.12469

APA

Fosgerau, M., Melo, E., De Palma, A., & Shum, M. (2020). DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT. International Economic Review, 61(4), 1569-1589. https://doi.org/10.1111/iere.12469

Vancouver

Fosgerau M, Melo E, De Palma A, Shum M. DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT. International Economic Review. 2020 Jun 16;61(4):1569-1589. https://doi.org/10.1111/iere.12469

Author

Fosgerau, Mogens ; Melo, Emerson ; De Palma, Andre ; Shum, Matthew. / DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT. In: International Economic Review. 2020 ; Vol. 61, No. 4. pp. 1569-1589.

Bibtex

@article{80eedaef0d0c4c9db3c907938ed711e1,
title = "DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT",
abstract = "This article establishes a general equivalence between discrete choice and rational inattention models. Mat{\v e}jka and McKay (2015) showed that when information costs are modeled using the Shannon entropy, the choice probabilities in the rational inattention (RI) model take the multinomial logit form. We show that, for one given prior over states, RI choice probabilities may take the form of any additive random utility discrete choice model (ARUM) when the information cost is a Bregman information, a class defined in this article. The prior information of the rationally inattentive agent is summarized in a constant vector of utilities in the corresponding ARUM.",
author = "Mogens Fosgerau and Emerson Melo and {De Palma}, Andre and Matthew Shum",
year = "2020",
month = jun,
day = "16",
doi = "10.1111/iere.12469",
language = "English",
volume = "61",
pages = "1569--1589",
journal = "International Economic Review",
issn = "0020-6598",
publisher = "Wiley-Blackwell",
number = "4",

}

RIS

TY - JOUR

T1 - DISCRETE CHOICE AND RATIONAL INATTENTION: A GENERAL EQUIVALENCE RESULT

AU - Fosgerau, Mogens

AU - Melo, Emerson

AU - De Palma, Andre

AU - Shum, Matthew

PY - 2020/6/16

Y1 - 2020/6/16

N2 - This article establishes a general equivalence between discrete choice and rational inattention models. Matějka and McKay (2015) showed that when information costs are modeled using the Shannon entropy, the choice probabilities in the rational inattention (RI) model take the multinomial logit form. We show that, for one given prior over states, RI choice probabilities may take the form of any additive random utility discrete choice model (ARUM) when the information cost is a Bregman information, a class defined in this article. The prior information of the rationally inattentive agent is summarized in a constant vector of utilities in the corresponding ARUM.

AB - This article establishes a general equivalence between discrete choice and rational inattention models. Matějka and McKay (2015) showed that when information costs are modeled using the Shannon entropy, the choice probabilities in the rational inattention (RI) model take the multinomial logit form. We show that, for one given prior over states, RI choice probabilities may take the form of any additive random utility discrete choice model (ARUM) when the information cost is a Bregman information, a class defined in this article. The prior information of the rationally inattentive agent is summarized in a constant vector of utilities in the corresponding ARUM.

U2 - 10.1111/iere.12469

DO - 10.1111/iere.12469

M3 - Journal article

C2 - 33288966

VL - 61

SP - 1569

EP - 1589

JO - International Economic Review

JF - International Economic Review

SN - 0020-6598

IS - 4

ER -

ID: 244328151