Is Attention Produced Rationally?

Aims: 

The proposed research aims to supplement existing work exploring whether individuals—including older individuals—appropriately value attention-increasing technologies such as reminders. Our research develops new theory to characterize how the demand for attention improvements must vary with the pecuniary incentive to be attentive. In addition, our model allows us to assess the extent to which individuals under-value (or overvalue) attention-improving technologies. We are seeking funding to run a follow-up experiment that will complement our existing studies to be responsive to a Reject and Resubmit at Econometrica, a top-five economics journal.

Abstract: 

A large and growing literature shows that attention-increasing interventions, such as reminders and planning prompts, can promote important behaviors. Our project develops a method to investigate whether people value attention-increasing tools rationally. We characterize how the demand for attention improvements must vary with the pecuniary incentive to be attentive and develop quantitative tests of rational inattention. In our first round of data collection, we deployed this method in two experiments. The first is an experiment with an online education platform run in the field (n=1,373), in which we randomize incentives to complete course modules and incentives to make plans to complete the modules. The second is an online survey-completion experiment (n=944), in which we randomize incentives to complete a survey three weeks later and the price of reminders to complete the survey. In both experiments, as incentives to complete a task increase, demand for attentionimproving technologies also increases. However, our tests suggest that the increase in demand for attention improvements is too small relative to the null of full rationality, indicating that people underuse attentionincreasing tools. In our second experiment, we estimate that individuals undervalue the benefits of reminders by 59%. This research has generated a paper, see https://users.nber.org/~kesslerj/papers/Bronchetti_etal_Attention.pdf, that is Reject and Resubmit at Econometrica, a top-five economics journal. To prepare it for its resubmission, we have developed a plan that involves running a new version of the second experiment described above. Our new version will introduce more variation in when individuals will be asked to complete the follow-on survey (e.g., introducing variation in the time to do the survey ranging from 1 day to 6 weeks, rather than only 3 weeks as in our original experiment) and larger variation in incentives to complete the survey. Our new study will allow us to assess whether individuals systematically underestimate the value of reminders or whether they both overestimate and underestimate the benefit of reminders as a function of the reminders’ efficacy. This new study will involve recruiting many more participants. We are targeting 3,600 (rather than the 944 we collected initially). This additional data will allow us to explicitly explore older individuals and—in particular—test whether they differ from younger individuals in both the efficacy of reminders and the extent to which they undervalue reminders. Understanding how age interacts with these factors is important for considering interventions to help older individuals remember to follow-through on important actions, including actions relating to their health and financial well-being. Exploring an older population is particularly interesting given results from our initial study which found that our oldest subjects systematically undervalued reminder technology to an even greater extent than our average subject.

Funded By: 
Boettner
Award Dates: 
July 1, 2021 - June 30, 2022