Quantitative Economics
Journal Of The Econometric Society
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Edited by: Stéphane Bonhomme • Print ISSN: 1759-7323 • Online ISSN: 1759-7331
Quantitative Economics: Jan, 2024, Volume 15, Issue 1
https://doi.org/10.3982/QE2050
p. 115-144
Roc Armenter, Michèle Müller‐Itten, Zachary R. Stangebye
We present a geometric approach to the finite Rational Inattention (RI) model, recasting it as a convex optimization problem with reduced dimensionality that is well suited to numerical methods. We provide an algorithm that outperforms existing RI computation techniques in terms of both speed and accuracy in both static and dynamic RI problems. We further introduce methods to quantify the impact of numerical inaccuracy on the model's outcomes and to produce robust predictions regarding the most frequently implemented actions.
Roc Armenter, Michèle Müller-Itten, and Zachary R. Stangebye
This supplemental appendix contains material not found within the manuscript.
Roc Armenter, Michèle Müller-Itten, and Zachary R. Stangebye
The replication package for this paper is available at https://doi.org/10.5281/zenodo.8316359. The Journal checked the data and codes included in the package for their ability to reproduce the results in the paper and approved online appendices.
December 4, 2024