Is Attention Produced Rationally?

62 Pages Posted: 7 Jul 2020

See all articles by Erin Todd Bronchetti

Erin Todd Bronchetti

Swarthmore College

Judd Kessler

Business Economics and Public Policy

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 30, 2020

Abstract

A large and growing literature shows that attention-increasing interventions, such as reminders and planning prompts, can promote important behaviors. This paper develops a method to investigate whether people value attention-increasing tools rationally. We characterize how the demand for attention improvements must vary with the pecuniary incentive to be attentive and develop quantitative tests of rational inattention that we deploy in two experiments. The first is an experiment with an online education platform run in the field (n=1,373), in which we randomize incentives to complete course modules and incentives to make plans to complete the modules. The second is an online survey-completion experiment (n=944), in which we randomize incentives to complete a survey three weeks later and the price of reminders to complete the survey. In both experiments, as incentives to complete a task increase, demand for attention-improving technologies also increases. However, our tests suggest that the increase in demand for attention improvements is too small relative to the null of full rationality, indicating that people underuse attention-increasing tools. In our second experiment, we estimate that individuals undervalue the benefits of reminders by 59%.

JEL Classification: C91,C93,D91

Suggested Citation

Bronchetti, Erin Todd and Kessler, Judd and Magenheim, Ellen and Taubinsky, Dmitry and Zwick, Eric, Is Attention Produced Rationally? (June 30, 2020). University of Chicago, Becker Friedman Institute for Economics Working Paper No. 2020-91, Available at SSRN: https://ssrn.com/abstract=3639639 or http://dx.doi.org/10.2139/ssrn.3639639

Erin Todd Bronchetti

Swarthmore College ( email )

500 College Avenue
Swarthmore, PA 19081
United States

Judd Kessler

Business Economics and Public Policy ( email )

3641 Locust Walk
Philadelphia, PA 19104-6372
United States

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

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 (Contact Author)

University of Chicago - Finance ( email )

5807 S. Woodlawn Avenue
Chicago, IL 60637
United States

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