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Optimal Sequential Decision with Limited Attention

Mierendorff, JK; Che, YK; (2017) Optimal Sequential Decision with Limited Attention. UCL Department of Economics: London, UK. Green open access

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Abstract

We consider a dynamic model of information acquisition. Before taking an action, a decision maker may direct her limited attention to collecting different types of evidence that support alternative actions. The optimal policy combines three strategies: (i) immediate action, (ii) a contradictory strategy seeking to challenge the prior belief, and (iii) a confirmatory strategy seeking to confirm the prior. The model produces a rich dynamic stochastic choice pattern as well as predictions in settings such as jury deliberation and political media choice.

Type: Working / discussion paper
Title: Optimal Sequential Decision with Limited Attention
Open access status: An open access version is available from UCL Discovery
Publisher version: http://www.homepages.ucl.ac.uk/~uctpkmi/
Language: English
Keywords: Wald sequential decision problem, choice of information, contradictory and confirmatory learning strategies, limited attention
UCL classification: UCL
UCL > Provost and Vice Provost Offices > UCL SLASH
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS
UCL > Provost and Vice Provost Offices > UCL SLASH > Faculty of S&HS > Dept of Economics
URI: https://discovery.ucl.ac.uk/id/eprint/10037620
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