How do people actually make decisions when faced with limited attention, costly search, or cognitive costs? Traditional economic models often assume that individuals weigh all options effortlessly and act optimally. But a growing body of theoretical experimental research reveals a more nuanced picture, whereby the process by which people gather and use information – on prices, the stock market, inflation, competitors, politicians, etc. – plays a central role in shaping their choices.
This year we will cover four main themes: how people acquire and use information; how we can obtain and what we can learn from process data (like response times or attention markers); what it means when choices appear inattentive or noisy. Across all topics, we will overview available methodologies and existing experimental evidence as well as discuss existing open questions. This line of research bridges several fields within economics and beyond (cognitive sciences and computer science) and draws on methods from decision theory, behavioural economics, and information theory. While rooted in experimental and behavioural economics, these topics are also relevant to other fields. It can help shed light on infrequent portfolio rebalancing and investor inattention in finance, inform macroeconomic models of expectation formation and perceived policy credibility, and it enables better testing of discrete choice models in industrial organisation. Further, it has deep implications for policy and for theory alike: if people fail to learn optimally or ignore relevant information, how should we model their behaviour and how should we design institutions in response?
The goal of this course is not just to teach tools, but to spark questions and inspire research. It is aimed at PhD students interested in these topics and methods.