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We provide an information-based theory of matching efficiency fluctuations. Rationally inattentive firms have limited …
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Welfare Economics. A key theme of Cognitive Economics is finite cognition (often misleadingly called “bounded rationality …
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Welfare Economics. A key theme of Cognitive Economics is finite cognition (often misleadingly called "bounded rationality …
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How can so many people suddenly sign on to a questionable idea? And then, why do they often change their opinion just as quickly? Over the last two decades, economists have tried to answer those questions using cascade theories, which attempt to explain the emergence and evolution of transient...
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-contingent consequences. In a menu choice setting, we study an axiomatic model of decision making with scarce attention. A decision maker … satisfying our axioms acts as if she chooses a joint distribution over a product space of states and signals. The decision maker … scarcity from choice behavior, and thereby clarify the decision theoretic foundations of rational inattention models proposed …
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