We study a model of Bayesian persuasion in which Receiver has limited information-processing capacity, or attention, and must exert costly effort to process Sender's signals. Receiver is rationally inattentive (Sims (2003)): attention costs are proportional to the mutual information (expected...

We conduct two experiments in the securities-based crowdfunding setting to investigate whether, for psychological reasons, some investors avoid accounting information they could and would use in their decision making. We find in our first experiment nonprofessional investors more likely to...

Given that many of the predicted effects of climate change are considered imminent and unavoidable, the need to mainstream adaptation as a viable coping measure among private households is becoming a topic of increasing importance. However, little research to date has assessed the factors...

We study information acquisition in a coordination game with incomplete information. To capture the idea that players can flexibly decide what information to acquire, we do not impose any physical restriction on feasible information structure. Facing an informational cost measured by reduction...

We investigated experimentally whether people can be induced to believe in a non-existent expert, and subsequently pay for what can only be described as transparently useless advice about future chance events. Consistent with the theoretical predictions made by Rabin (2002) and Rabin and Vayanos...

A number of behavioral finance theories posit that investors adhere to prior beliefs in spite of new information. This paper reports the results of an investment experiment which shows that subjects' inferences are biased by their prior beliefs in a manner that depends on investment outcomes....

We develop a tractable framework incorporating ambiguity aversion into rational inattention. We model uncertainty using smooth ambiguity (Klibanoff, Marinacci, and Mukerji, 2005) and define entropy-based information costs on the predictive prior distribution, which allows us to rewrite the...

Empirical evidence suggests that individuals selectively avoid information, depending on a relevant past choice or lack thereof. We address these findings by studying an agent whose choice behavior can be modeled as if she trades off two conflicting effects of information. The first is a...