Inferring cognitive heterogeneity from aggregate choices

Dardanoni, Valentino, Manzini, Paola, Mariotti, Marco and Tyson, Christopher J (2018) Inferring cognitive heterogeneity from aggregate choices. Working Paper. University of Sussex.

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Abstract

One potentially important drawback of existing theories of limited attention is that they typically assume a rich dataset of choices from many menus. We study the problem of identifying the distribution of cognitive characteristics in a population of agents when only aggregate choice behavior from a single menu is observable. We show how both “consideration probability” and “consideration capacity” distributions can be substantially identified by aggregate choice shares. We also suggest how to embed the attention models in an econometric specification of the inference problem. Finally, we sucessfully use our results to recover the true parameters in Monte Carlo simulations of both models.

Item Type: Reports and working papers (Working Paper)
Keywords: D01;D12;D91;attention;bounded rationality;consideration set;stochastic choice
Schools and Departments: University of Sussex Business School > Economics
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Date Deposited: 19 Feb 2020 09:49
Last Modified: 19 Feb 2020 09:49
URI: http://sro.sussex.ac.uk/id/eprint/89888

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