Geometric methods for finite rational inattention

Roc Armenter, Michèle Müller‐Itten, Zachary R. Stangebye

We present a geometric approach to the finite Rational Inattention (RI) model, recasting it as a convex optimization problem with reduced dimensionality that is well suited to numerical methods. We provide an algorithm that outperforms existing RI computation techniques in terms of both speed and accuracy in both static and dynamic RI problems. We further introduce methods to quantify the impact of numerical inaccuracy on the model's outcomes and to produce robust predictions regarding the most frequently implemented actions.

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Year of publication:	2024
Authors:	Armenter, Roc ; Müller-Itten, Michèle ; Stangebye, Zachary R.
Published in:	Quantitative economics : QE ; journal of the Econometric Society. - Oxford [u.a.] : Wiley, ISSN 1759-7331, ZDB-ID 2569569-1. - Vol. 15.2024, 1, p. 115-144
Subject:	Rational inattention \| Shannon entropy \| information acquisition \| learning \| consideration sets \| Entropie \| Entropy \| Theorie \| Theory \| Informationsverhalten \| Information behaviour \| Rationalität \| Rationality \| Informationsversorgung \| Information provision \| Lernprozess \| Learning process \| Begrenzte Rationalität \| Bounded rationality \| Informationsökonomik \| Economics of information \| Konsumentenverhalten \| Consumer behaviour

Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Research data:	https://doi.org/10.5281/zenodo.8316359
Other identifiers:	10.3982/QE2050 [DOI] hdl:10419/296355 [Handle]
Classification:	C63 - Computational Techniques ; D81 - Criteria for Decision-Making under Risk and Uncertainty ; D83 - Search, Learning, Information and Knowledge
Source:	ECONIS - Online Catalogue of the ZBW

Persistent link: https://ebvufind01.dmz1.zbw.eu/10014496939