ICES Special Talk
Attention Theory
Monday, October 10, 2022 12:00 PM to 1:00 PM EDT
Vernon Smith Hall (formerly Metropolitan Building), #5183
ICES will host a Special Talk this Fall 2022 semester that will feature:
National University of Singapore
Attention Theory
Abstract
We model the role of attention in decision making under risk and uncertainty from the perspective of the decision maker as a cognitive miser, and arrive at the utility of a lottery through unstable attention-dependent decision weights. The resulting Attention Theory (AT) can account for a broad range of choice phenomena under different attentional attitudes. Under a top-down consequentialist attention, AT exhibits continuity in decision weights and can account for Allais behavior, fourfold pattern of risk attitude, and disjunction effect. Under a weaker form of consequentialist attention, AT can exhibit ambiguity aversion, discontinuity in valuation from event splitting, and deliver an attention-based regret theory in binary choice. Under moderate inattention involving the presence of bottom-up salience, AT delivers context sensitive choice featuring variable loss aversion driven disproportionately by loss stimuli as well as source preference including familiarity bias. It further delivers, in binary choice, a loss-gain asymmetric salience theory. When bottom-up salience is predominant, AT yields an attention based random utility, giving rise to stochastic intransitivity in binary choice.
