Growing attention

Abstract

We model a boundedly rational agent who exhibits limited and heterogeneous attention. The agents' attention can be naturally sorted in an ascending order. We provide a characterization result using two simple behavioral postulates. Unlike earlier models, consideration sets' composition and frequency are uniquely identified. Within our framework, we accommodate unobserved heterogeneity in attention and unobserved preferences. Furthermore, we explore various extensions of our model and provide insights into the comparative statics of attentiveness levels in two probabilistic choices.