Attention Management

29 Pages Posted: 30 Apr 2018 Last revised: 20 Apr 2019

See all articles by Elliot Lipnowski

Elliot Lipnowski

Columbia University

Laurent Mathevet

New York University (NYU) - Department of Economics

Dong Wei

University of California, Berkeley - Department of Economics

Date Written: April 15, 2019

Abstract

Attention costs can cause some information to be ignored and decisions to be imperfect. Can we improve the material welfare of a rationally inattentive agent by restricting his information in the first place? In our model, a well-intentioned principal provides information to an agent for whom information is costly to process, but the principal does not internalize this cost. We show that full information is universally optimal if and only if the environment comprises one issue. With multiple issues, attention management becomes optimal: the principal restricts some information to induce the agent to pay attention to other aspects.

Keywords: information disclosure, rational inattention, costly information processing, paternalistic information design

JEL Classification: D82, D83, D91

Suggested Citation

Lipnowski, Elliot and Mathevet, Laurent and Wei, Dong, Attention Management (April 15, 2019). Available at SSRN: https://ssrn.com/abstract=3161782 or http://dx.doi.org/10.2139/ssrn.3161782

Elliot Lipnowski (Contact Author)

Columbia University ( email )

3022 Broadway
New York, NY 10027
United States

Laurent Mathevet

New York University (NYU) - Department of Economics ( email )

269 Mercer Street, 7th Floor
New York, NY 10011
United States

Dong Wei

University of California, Berkeley - Department of Economics ( email )

579 Evans Hall
Berkeley, CA 94709
United States

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