Is Attention Produced Optimally? Theory and Evidence from Experiments with Bandwidth Enhancements

131 Pages Posted: 29 Jun 2020 Last revised: 26 Jun 2023

See all articles by Erin Todd Bronchetti

Erin Todd Bronchetti

Swarthmore College

Judd B. Kessler

University of Pennsylvania - Business & Public Policy Department

Ellen Magenheim

Swarthmore College

Dmitry Taubinsky

University of California, Berkeley - Department of Economics

Eric Zwick

University of Chicago - Finance

Multiple version iconThere are 2 versions of this paper

Date Written: June 2020

Abstract

This paper investigates whether people optimally value tools that reduce attention costs. We call these tools bandwidth enhancements (BEs) and characterize how demand for BEs varies with the pecuniary incentives to be attentive, under the null hypothesis of correct perceptions and optimal choice. We examine if the optimality conditions are satisfied in three experiments. The first is a field experiment (n = 1373) with an online education platform, in which we randomize incentives to complete course modules and incentives to utilize a plan-making tool to complete the modules. In the second experiment (n = 2306), participants must complete a survey in the future. We randomize survey-completion incentives and how long participants must wait to complete the survey, and we elicit willingness to pay for reminders. The third experiment (n = 1465) involves a psychometric task in which participants must identify whether there are more correct or incorrect mathematical equations in an image. We vary incentives for accuracy, elicit willingness to pay to reduce task difficulty, and examine the impact of learning and feedback. In all experiments, demand for reducing attention costs increases as incentives for accurate task completion increase. However, in all experiments—and across all conditions—our tests imply that this increase in demand is too small relative to the null of correct perceptions. These results suggest that people may be uncertain or systematically biased about their attention cost functions, and that experience and feedback do not necessarily eliminate bias.

Suggested Citation

Bronchetti, Erin Todd and Kessler, Judd B. and Magenheim, Ellen and Taubinsky, Dmitry and Zwick, Eric, Is Attention Produced Optimally? Theory and Evidence from Experiments with Bandwidth Enhancements (June 2020). NBER Working Paper No. w27443, Available at SSRN: https://ssrn.com/abstract=3637744

Erin Todd Bronchetti (Contact Author)

Swarthmore College ( email )

500 College Avenue
Swarthmore, PA 19081
United States

Judd B. Kessler

University of Pennsylvania - Business & Public Policy Department ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

HOME PAGE: http://https://bepp.wharton.upenn.edu/profile/1671/

Ellen Magenheim

Swarthmore College ( email )

500 College Ave
Swarthmore, PA 19081
United States

Dmitry Taubinsky

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

579 Evans Hall
Berkeley, CA 94709
United States

Eric Zwick

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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