Department of Economics

Faculty of Arts and Social Sciences


Seminar - Upcoming

2013 Asia Summer Institute in Behavioral Economics
Asian Meeting of the Econometric Society 2013
Past Events
Department Seminar


Random Attention Model


Yusufcan Masatlioglu
University of Michigan
Date: Oct 25, Tue
Time: 4 - 5:30 pm

Venue: Lim Tay Boh Seminar Room (AS2 03-12)
National University of Singapore
1 Arts Link, Singapore 117570

Chair: Satoru Takahashi

This paper investigate the revealed preference when the set of alternatives attracting atten- tion is stochastic. In the standard revealed preference argument relies on an implicit assumption that a decision maker considers all feasible alternatives. However, it is now evident that de- cision makers do not consider all products before making a purchase (Limited Attention). In this paper, we allow the decision maker probabilistically pays attention to subsets of all feasible alternatives. While the decision maker has stable preferences, due to stochastic attention, her choice behavior is probabilistic. Our model differs from the standard probabilistic choice literature since here the stochastic choice is not driven from the stochastic utility rather from stochastic consideration. We illustrate how one can deduce the decision maker’s preference from the observed behavior under very weak restrictions on stochastic attention sets. This makes the theory applicable to seemingly irrational choice patterns. Further, we provide a choice theoretical foundation for maximizing a single preference relation under stochastic attention.