Limited attention and models of choice: A behavioral equivalence

TL;DR

This paper demonstrates that many choice models can be represented as special cases of limited attention models, revealing properties of unobserved attention filters and their implications for understanding decision makers' preferences.

Contribution

It provides a unified framework linking various choice models to limited attention, and analyzes the properties and independence of different subclasses.

Findings

Limited attention models can replicate many choice behaviors.

Attention filters' properties explain observed choice violations.

Different subclasses of models are independent of each other.

Abstract

We show that many models of choice can be alternatively represented as special cases of choice with limited attention (Masatlioglu, Nakajima, and Ozbay, 2012), singling out the properties of the unobserved attention filters that explain the observed choices.For each specification, information about the DM's consideration sets and preference is inferred from violations of the contraction consistency axiom, and it is compared with the welfare indications obtained from equivalent models. Remarkably, limited attention always supports the elicitation of DM's taste arising from alternative methods. Finally, we examine the intersections between subclasses, and we verify that each of them is independent of the others.