We provide a full behavioral characterization of the standard Shannon model of rational inattention. The key axiom is "Invariance under Compression", which identifies this model as capturing an ideal form of attention-constrained choice. We introduce tractable generalizations that allow for many...

We develop a revealed preference test for optimal acquisition of costly information. The test encompasses models of rational inattention, sequential signal processing, and search. We provide limits on the extent to which attention costs can be recovered from choice data. We experimentally elicit...

1 Introduction to Cognitive Economics -- 2 Cognitive Household Finance -- 3 Measuring and Minimizing Mistakes -- 4 Cognitive Economics at Work -- 5 Cognitive Capital and Human-AI Interactions -- 6 Work Skills for the Cognitive Economy -- 7 Cognitive Economics in Teaching -- 8. Cognitive...

The model of rational inattention with Shannon mutual information costs is increasingly ubiquitous. We introduce a new solution method that lays bare the general behavioral properties of this model and liberates development of alternative models. We experimentally test a key behavioral property...