An Empirical Model of Endogenous Attention

Abstract

Before making a choice, individuals can gradually gather information on multiple different possible alternatives. Analysts may observe how long individuals spend gathering information on each alternative, when they switch from one alternative to another, and when they ultimately make their final choice. We develop an empirical model on this choice process, endogenizing the choice of which alternative the individual obtains information from at each point in time, and estimate the model with data from eye-tracking experiments. The empirical analysis yields estimates of the relative size of search costs, attention switching costs, and informativeness of search for information. Counterfactual analysis shows that higher attention switching costs reduce search duration and induce fewer attention switches; in comparison, higher search costs also reduce search duration but induce more attention switches. The model also predicts a positive correlation between attention to an alternative and the likelihood of choosing it, as individuals are more likely to seek additional information about options that they believe to be better.

Keywords: Search, Attention, Learning, Deep Reinforcement Learning