Core Brown Bag Seminar

Hassan Nosratabadi (CORE) will present his work "On Welfare Analysis under Limited Attention".

Abstract

-------------------------------------------------------------------

An observer wants to understand a decision-maker's preferences from her choice. She believes that decision-maker takes decisions under limited attention; i.e., does not consider all alternatives. In this paper, we make the point that given the nature of established experimental evidence, the existing models of limited attention are not quite helpful in fulfilling the observer's goal. Addressing this challenge, we propose a "minimal" adjustment to the theory of choice under limited attention by assuming that the decision-maker makes at least one comparison in her decision process. We illustrate that, as minimal as this adjustment is, it enriches the model with significant welfare relevance. We further apply our model to experimental data and establish that this significant increase in welfare relevance comes with negligible costs in explanatory power.

-------------------------------------------------------------------

This session will take place, as usual, in room c.035 at CORE.