IDEAS home Printed from https://ideas.repec.org/p/bfi/wpaper/2020-91.html
   My bibliography  Save this paper

Is Attention Produced Rationally?

Author

Listed:
  • Erin T. Bronchetti

    (Swarthmore College - Department of Economics)

  • Judd B. Kessler

    (University of Pennsylvania - The Wharton School; NBER)

  • Ellen B. Magenheim

    (Swarthmore College - Department of Economics)

  • Dmitry Taubinsky

    (University of California, Berkeley; NBER)

  • Eric Zwick

    (University of Chicago - Booth School of Business; NBER)

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%.

Suggested Citation

  • Erin T. Bronchetti & Judd B. Kessler & Ellen B. Magenheim & Dmitry Taubinsky & Eric Zwick, 2020. "Is Attention Produced Rationally?," Working Papers 2020-91, Becker Friedman Institute for Research In Economics.
    • Handle: RePEc:bfi:wpaper:2020-91
    as

    Download full text from publisher

    File URL: https://repec.bfi.uchicago.edu/RePEc/pdfs/BFI_WP_202091.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Damgaard, Mette Trier & Gravert, Christina, 2018. "The hidden costs of nudging: Experimental evidence from reminders in fundraising," Journal of Public Economics, Elsevier, vol. 157(C), pages 15-26.
    2. Filip Matêjka & Alisdair McKay, 2015. "Rational Inattention to Discrete Choices: A New Foundation for the Multinomial Logit Model," American Economic Review, American Economic Association, vol. 105(1), pages 272-298, January.
    3. Benjamin M. Marx & Lesley J. Turner, 2019. "Student Loan Nudges: Experimental Evidence on Borrowing and Educational Attainment," American Economic Journal: Economic Policy, American Economic Association, vol. 11(2), pages 108-141, May.
    4. Tasoff, Joshua & Letzler, Robert, 2014. "Everyone believes in redemption: Nudges and overoptimism in costly task completion," Journal of Economic Behavior & Organization, Elsevier, vol. 107(PA), pages 107-122.
    5. Xavier Gabaix & David Laibson & Guillermo Moloche & Stephen Weinberg, 2006. "Costly Information Acquisition: Experimental Analysis of a Boundedly Rational Model," American Economic Review, American Economic Association, vol. 96(4), pages 1043-1068, September.
    6. Ned Augenblick & Muriel Niederle & Charles Sprenger, 2015. "Editor's Choice Working over Time: Dynamic Inconsistency in Real Effort Tasks," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 130(3), pages 1067-1115.
    7. Steven D. Levitt & John A. List & Susanne Neckermann & Sally Sadoff, 2016. "The Behavioralist Goes to School: Leveraging Behavioral Economics to Improve Educational Performance," American Economic Journal: Economic Policy, American Economic Association, vol. 8(4), pages 183-219, November.
    8. Altmann, Steffen & Traxler, Christian, 2014. "Nudges at the dentist," European Economic Review, Elsevier, vol. 72(C), pages 19-38.
    9. Pedro Bessone & Gautam Rao & Frank Schilbach & Heather Schofield & Mattie Toma, 2021. "The Economic Consequences of Increasing Sleep Among the Urban Poor," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 136(3), pages 1887-1941.
    10. Keith M. Marzilli Ericson, 2011. "Forgetting We Forget: Overconfidence And Memory," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 43-60, February.
    11. Andrew Caplin, 2016. "Measuring and Modeling Attention," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 379-403, October.
    12. Dean Karlan & Margaret McConnell & Sendhil Mullainathan & Jonathan Zinman, 2016. "Getting to the Top of Mind: How Reminders Increase Saving," Management Science, INFORMS, vol. 62(12), pages 3393-3411, December.
    13. Hunt Allcott & Judd B. Kessler, 2019. "The Welfare Effects of Nudges: A Case Study of Energy Use Social Comparisons," American Economic Journal: Applied Economics, American Economic Association, vol. 11(1), pages 236-276, January.
    14. Sandro Ambuehl & Axel Ockenfels & Colin Stewart, 2018. "Attention and Selection Effects," Working Papers tecipa-607, University of Toronto, Department of Economics.
    15. Bronchetti, Erin Todd & Huffman, David B. & Magenheim, Ellen, 2015. "Attention, intentions, and follow-through in preventive health behavior: Field experimental evidence on flu vaccination," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 270-291.
    16. Benjamin L. Castleman & Lindsay C. Page, 2016. "Freshman Year Financial Aid Nudges: An Experiment to Increase FAFSA Renewal and College Persistence," Journal of Human Resources, University of Wisconsin Press, vol. 51(2), pages 389-415.
    17. Ximena Cadena & Antoinette Schoar, 2011. "Remembering to Pay? Reminders vs. Financial Incentives for Loan Payments," NBER Working Papers 17020, National Bureau of Economic Research, Inc.
    18. Milkman, Katherine L. & Beshears, John Leonard & Choi, James J. & Laibson, David I. & Madrian, Brigitte, 2011. "Using Implementation Intentions Prompts to Enhance Influenza Vaccination Rates," Scholarly Articles 8057976, Harvard Kennedy School of Government.
    19. Rema Hanna & Sendhil Mullainathan & Joshua Schwartzstein, 2014. "Learning Through Noticing: Theory and Evidence from a Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 129(3), pages 1311-1353.
    20. Sims, Christopher A., 2003. "Implications of rational inattention," Journal of Monetary Economics, Elsevier, vol. 50(3), pages 665-690, April.
    21. Leandro Carvalho & Dan Silverman, 2019. "Complexity and Sophistication," NBER Working Papers 26036, National Bureau of Economic Research, Inc.
    22. Sendhil Mullainathan, 2002. "A Memory-Based Model of Bounded Rationality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 117(3), pages 735-774.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Rodemeier, Matthias, 2021. "Buy baits and consumer sophistication: Theory and field evidence from large-scale rebate promotions," CAWM Discussion Papers 124, University of Münster, Münster Center for Economic Policy (MEP).
    2. Zhi Li & Po-Hsuan Lin & Si-Yuan Kong & Dongwu Wang & John Duffy, 2021. "Conducting large, repeated, multi-game economic experiments using mobile platforms," PLOS ONE, Public Library of Science, vol. 16(4), pages 1-18, April.
    3. Zarek Brot-Goldberg & Timothy Layton & Boris Vabson & Adelina Yanyue Wang, 2023. "The Behavioral Foundations of Default Effects: Theory and Evidence from Medicare Part D," American Economic Review, American Economic Association, vol. 113(10), pages 2718-2758, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Erin T. Bronchetti & Judd B. Kessler & Ellen B. Magenheim & Dmitry Taubinsky & Eric Zwick, 2023. "Is Attention Produced Optimally? Theory and Evidence From Experiments With Bandwidth Enhancements," Econometrica, Econometric Society, vol. 91(2), pages 669-707, March.
    2. Xavier Gabaix, 2017. "Behavioral Inattention," NBER Working Papers 24096, National Bureau of Economic Research, Inc.
    3. Emma Boswell Dean & Frank Schilbach & Heather Schofield, 2017. "Poverty and Cognitive Function," NBER Chapters, in: The Economics of Poverty Traps, pages 57-118, National Bureau of Economic Research, Inc.
    4. Damgaard, Mette Trier & Nielsen, Helena Skyt, 2018. "Nudging in education," Economics of Education Review, Elsevier, vol. 64(C), pages 313-342.
    5. Löfgren, Åsa & Nordblom, Katarina, 2020. "A theoretical framework of decision making explaining the mechanisms of nudging," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 1-12.
    6. Maria De Paola & Francesca Gioia & Fabio Piluso, 2020. "Does Reminding of Behavioural Biases Increase Returns from Financial Trading? A Field Experiment," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 12(2), pages 1-1, February.
    7. George Loewenstein & Zachary Wojtowicz, 2023. "The Economics of Attention," CESifo Working Paper Series 10712, CESifo.
    8. Dean Karlan & Margaret McConnell & Sendhil Mullainathan & Jonathan Zinman, 2016. "Getting to the Top of Mind: How Reminders Increase Saving," Management Science, INFORMS, vol. 62(12), pages 3393-3411, December.
    9. Bartosz Maćkowiak & Filip Matějka & Mirko Wiederholt, 2023. "Rational Inattention: A Review," Journal of Economic Literature, American Economic Association, vol. 61(1), pages 226-273, March.
    10. Suvrat Dhanorkar & Enno Siemsen, 2021. "How Nudges Lead to Improved Energy Efficiency in Manufacturing: Evidence from Archival Data and a Field Study," Production and Operations Management, Production and Operations Management Society, vol. 30(10), pages 3735-3757, October.
    11. Altmann, Steffen & Grunewald, Andreas & Radbruch, Jonas, 2019. "Passive Choices and Cognitive Spillovers," IZA Discussion Papers 12337, Institute of Labor Economics (IZA).
    12. Hirani, Jonas Cuzulan & Wüst, Miriam, 2023. "Reminder Design and Childhood Vaccination Coverage," IZA Discussion Papers 15877, Institute of Labor Economics (IZA).
    13. Damgaard, Mette Trier & Gravert, Christina, 2018. "The hidden costs of nudging: Experimental evidence from reminders in fundraising," Journal of Public Economics, Elsevier, vol. 157(C), pages 15-26.
    14. Patterson, Richard W., 2018. "Can behavioral tools improve online student outcomes? Experimental evidence from a massive open online course," Journal of Economic Behavior & Organization, Elsevier, vol. 153(C), pages 293-321.
    15. Jan Hausfeld & Sven Resnjanskij, 2017. "Risky Decisions and the Opportunity Costs of Time," TWI Research Paper Series 108, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    16. Dominik Naeher, 2022. "Technology Adoption Under Costly Information Processing," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 63(2), pages 699-753, May.
    17. Antinyan, Armenak & Bellio, Stefania & Bertoni, Marco & Corazzini, Luca & Narne, Elena, 2021. "Digital Access to Healthcare Services and Healthcare Utilization: A Quasi-Experiment," IZA Discussion Papers 14916, Institute of Labor Economics (IZA).
    18. Ori Heffetz & Ted O'Donoghue & Henry S. Schneider, 2016. "Forgetting and Heterogeneity in Task Delay: Evidence from New York City Parking-Ticket Recipients," NBER Working Papers 23012, National Bureau of Economic Research, Inc.
    19. Essl, Andrea & Steffen, Angela & Staehle, Martin, 2021. "Choose to reuse! The effect of action-close reminders on pro-environmental behavior," Journal of Environmental Economics and Management, Elsevier, vol. 110(C).
    20. Beshears, John & Kosowsky, Harry, 2020. "Nudging: Progress to date and future directions," Organizational Behavior and Human Decision Processes, Elsevier, vol. 161(S), pages 3-19.

    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bfi:wpaper:2020-91. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Toni Shears (email available below). General contact details of provider: https://edirc.repec.org/data/mfichus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.