The Psychology of Attention, Economic Behaviour and Policy Interventions

ABSTRACT:

We plan to develop new models of economic decision making based on the psychology of selective memory and attention, and to assess their explanatory power in field experiments concerning households’ decision to engage in energy conservation. The project is articulated in three parts. Part one studies selective memory as a source of instability in choice under risk, in conditions of description, experience, and ambiguity. Part two plans to integrate the mechanisms of bottom-up and top-down attention, studied for instance in the rational inattention and efficient coding literatures (Woodford, 2020). This is also an important understudied issue: sometimes our goals can guide our attention to focus on non-salient but payoff important information. Understanding when this happens is key to identify the scope of salience-based distortions and to study strategic situations, in which players' goals are a key guide for action. Part three studies the role of selective memory and attention in the field, with particular reference to policies seeking to enhance energy conservation, a highly policy relevant domain today.  

Other Research Units: 

• Giovanna D'Aadda, Università degli Studi di Milano