Rational Inattention and Non-monotonic Pricing

Kemal Ozbek

    Research output: Working paper


    This paper studies the choice problem of a rationally inattentive decision maker and shows how optimal information choices can be found when the information acquisition costs are additively separable. As an application of this general problem, a simple buyer-seller problem is considered where the buyer is rationally inattentive to the seller's riskiness. It is shown that the optimal pricing strategy of the seller should be non-monotonic in the degree of the buyer's attentiveness.
    Original languageEnglish
    Number of pages22
    Publication statusUnpublished - 2013


    • additive separability
    • information acquisition
    • non-monotonic pricing
    • rational inattention


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