We propose a new measure of the cost of information structures in rational inattention problems, the "neighborhood-based" cost functions, given that many applications involve states with a topological structure. These cost functions summarize the results of a sequential information sampling...

The literature exploring other regarding behavior sheds important light on interesting social phenomena, yet less attention has been given to how the received results speak to foundational assumptions within economics. Our study synthesizes the empirical evidence, showing that recent work...

Most economic analyses presume that there are limited differences in the prior beliefs of individuals, as assumption most often justified by the argument that sufficient common experiences and observations will eliminate disagreements. We investigate this claim using a simple model of Bayesian...

There are a host of potentially risky behaviors in which youth engage, which have important implications for both their well being as youth and their life prospects. The past decade has seen dramatic shifts in the intensity with which youths pursue these risky activities: for example, youth...

This paper explains why investors are likely to be overconfident and how this behavioral bias affects investment decisions. Our analysis suggests that investor overconfidence can potentially generate stock return momentum and that this momentum effect is likely to be the strongest in those...

We analyze the diffusion of rival information in a social network. In our model, rational agents can share information sequentially, unconstrained by an exogenous protocol or timing. We show how to compute the set of eventually informed agents for any network, and show that it is essentially...

There are a couple of well-known unsatisfactory properties in the notion of effective demand defined by Benassy and one by Dreze. This is why recent authors in disequilibrium analysis study the stochastic rationing mechanism. Douglas Gale proved the existence of the equilibrium with stochastic...

A large literature treats take-up of commitment contracts, in the form of choice-set restrictions or penalties, as a smoking gun for time-inconsistency or self-control problems (for short, "present focus"). This paper develops techniques for inspecting this assumption, presents new...

We study the efficiency of competitive markets when people are rationally inattentive. Appropriate amendments of the Welfare Theorems hold if attention costs satisfy an invariance condition, which amounts to free disposal of decision-irrelevant aspects of the state of nature. This condition is...