Calendrier du 04 février 2019
Roy Seminar (ADRES)
Du 04/02/2019 de 17:00 à 18:30
Salle R1-09, Campus Jourdan, 48 boulevard Jourdan, 75014 Paris
MENSCH Jeffrey (The Hebrew University of Jerusalem)
Rational Inattention and the Monotone Likelihood Ratio Property
A commonly assumed feature of games with complementarities is that players have noisy signals of the underlying state of the world that are ordered by the monotone likelihood ratio property (MLRP). At the same time, a large literature has recently explored the behavior of rationally inattentive agents. I provide a connection between these two literatures, showing that a decision maker with payoffs that satisfy increasing differences (ID) will always acquire signals that are ordered by the MLRP if and only if he has attention costs proportional to entropy reduction. I extend this result to games, providing conditions under which players first acquire MLRP-ordered signals, and then choose higher actions given higher realizations of the signals. Applications are given to global games and independent private-value auctions.
Régulation et Environnement
Du 04/02/2019 de 12:00 à 13:00
salle R1-13, campus Jourdan - 75014 Paris
STERN Lennart (PSE)
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