Costs of attention, while central to choice behavior, have proven hard to measure. We introduce a simple method of recovering them from choice data. Our recovery method rests on the observation that costs of attention play precisely the same role in consumer choice as do a competitive firm's...

We model agents who get utility from their beliefs and therefore interpret information optimistically. They may exhibit several biases observed in psychological studies such as optimism, procrastination, confirmation bias, polarization, and the endowment effect. In some formulations, they...

Cognitive decline may lead older Americans to make poor financial decisions. Preventing poor decisions may require timely transfer of financial control to a reliable agent. Cognitive decline, however, can develop unnoticed, creating the possibility of suboptimal timing of the transfer of...

We study whether the effects of monetary policy are dependent on the demographic structure of the population. We exploit cross-sectional variation in the response of US states to an identified monetary policy shock. We find that there are three distinct age groups. In response to an increase in...

This paper is motivated by a set of cross-country observations on growth, structural transformation, and investment rates in a large sample of countries. We observe a hump-shaped relationship between a country's investment rate and its level of development, both within countries over time and...

Economic data engineering deliberately designs novel forms of data to solve fundamental identification problems associated with economic models of choice. I outline three diverse applications: to the economics of information; to life-cycle employment, earnings, and spending; and to public policy...

Consumers often face an overwhelming amount of information when deciding between products, and one of the primary policymaking tools available to improve their informativeness is the framing of this information. We introduce a general theoretical approach that characterizes when one frame is...

We use a controlled experiment to show that ability and belief calibration jointly determine the benefits of working with Artificial Intelligence (AI). AI improves performance more for people with low baseline ability. However, holding ability constant, AI assistance is more valuable for people...

We demonstrate that cognitive constraints produce injustice in its most paradigmatic form: incorrect verdicts in judicial trials. Responding to a request for help, we conducted a field study in Mexican labor courts in which time pressure on the judges leads to their making mistakes, many of...

The attractive properties of the Deferred Acceptance (DA) algorithm rest on the assumption of perfect information. Yet field studies of school matching show that information is imperfect, particularly for disadvantaged students. We model costly strategic learning when schools are ex ante...