Data and Code for: State-dependent attention and pricing decisions

Principal Investigator(s): View help for Principal Investigator(s) Javier Turen, Pontificia Universidad Catolica de Chile

Version: View help for Version V1

Name	File Type	Size	Last Modified
Baseline_NO_Filter			06/29/2022 10:54:AM
Common Cost Info			06/29/2022 11:52:AM
Common Price			06/29/2022 12:47:PM
First_&_second_moment			06/29/2022 12:49:PM
First_moment			06/29/2022 12:51:PM
Static Model			06/29/2022 01:46:PM

Project Description

Summary:

This paper studies price-setting decisions under Rational Inattention. Prices are set by tracking an unobserved target whose distribution is also unknown. Information acquisition is dynamic and fully flexible since, given information acquired previously, price-setters choose the amount of information they collect as well as how they want to learn about both the outcome and its distribution. We show that by allowing for imperfect information to be the unique source of rigidity, the model can reconcile stylized facts in the microeconomic evidence on price setting while simultaneously being consistent with empirical results on state-dependent attention.

Scope of Project

JEL Classification:
      D82 Asymmetric and Private Information; Mechanism Design
      D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
      E31 Price Level; Inflation; Deflation
      E32 Business Fluctuations; Cycles

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Published Versions

V1 [2023-03-27]

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DDI 2.5

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