American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
The Status Quo and Belief Polarization of Inattentive Agents: Theory and Experiment
American Economic Journal: Microeconomics
vol. 16,
no. 4, November 2024
(pp. 1–39)
Abstract
We show that rational but inattentive agents can become polarized ex ante. We present how optimal information acquisition and subsequent belief formation depend crucially on the agent-specific status quo valuation. Beliefs can systematically—in expectations over all possible signal realizations conditional on the state of the world—update away from the realized truth, and even agents with the same initial beliefs might become polarized. We design a laboratory experiment to test the model's predictions. The results confirm our predictions about the mechanism (rational information acquisition) and its effect on beliefs (systematic polarization), and they provide general insights into demand for information.Citation
Novák, Vladimír, Andrei Matveenko, and Silvio Ravaioli. 2024. "The Status Quo and Belief Polarization of Inattentive Agents: Theory and Experiment." American Economic Journal: Microeconomics, 16 (4): 1–39. DOI: 10.1257/mic.20210352Additional Materials
JEL Classification
- C92 Design of Experiments: Laboratory, Group Behavior
- D72 Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- 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
There are no comments for this article.
Login to Comment