Xinwei Ma, University of California, San Diego

Attention Overload (w/Matias D. Cattaneo, Paul Cheung & Yusufcan Masatlioglu)

Abstract: We introduce an attention overload model which captures the idea that alternatives compete for the decision maker’s attention, and hence the attention frequency each option receives decreases as more alternatives are available. We show that a fruitful revealed preference theory can be developed, and provide testable implications on the choice behavior which can be used to partially identify the decision maker’s preference. Econometric methods are also developed for statistical inference. Importantly, our procedures remain valid even in settings where the number of alternatives and the number of choice problems are large relative to the sample size.