American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
Rational Inattention in the Infield
American Economic Journal: Microeconomics
vol. 14,
no. 4, November 2022
(pp. 348–93)
Abstract
This paper provides evidence of rational inattention by experienced professionals in strategic interactions. We add rational inattention to a game of matching pennies with state-dependent payoffs. Unlike the full-information, mixed-strategy Nash equilibrium, payoffs of different actions need not be equated state by state. Moreover, players respond partially to payoff differences, this responsiveness is stronger when attention costs are lower, strategies converge to full-information Nash as stakes increase, and average payoffs across all states are approximately equal across actions. We test these predictions using data on millions of pitches from Major League Baseball, where we observe strategies, payoffs, and proxies for attention costs.Citation
Bhattacharya, Vivek, and Greg Howard. 2022. "Rational Inattention in the Infield." American Economic Journal: Microeconomics, 14 (4): 348–93. DOI: 10.1257/mic.20200310Additional Materials
JEL Classification
- C72 Noncooperative Games
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
- D91 Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
- L83 Sports; Gambling; Restaurants; Recreation; Tourism
- Z21 Sports Economics: Industry Studies
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