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Identification and Estimation of A Rational Inattention Discrete Choice Model with Bayesian Persuasion

Moyu Liao

arXiv 17 Sep 2020 · Econometrics

arXiv:2009.08045 · PDF · DOI · OpenAlex · Extracted main text

Abstract

This paper studies the semi-parametric identification and estimation of a rational inattention model with Bayesian persuasion. The identification requires the observation of a cross-section of market-level outcomes. The empirical content of the model can be characterized by three moment conditions. A two-step estimation procedure is proposed to avoid computation complexity in the structural model. In the empirical application, I study the persuasion effect of Fox News in the 2000 presidential election. Welfare analysis shows that persuasion will not influence voters with high school education but will generate higher dispersion in the welfare of voters with a partial college education and decrease the dispersion in the welfare of voters with a bachelors degree.

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Matejka, Filip and Alisdair McKay (2015) Rational inattention to discrete choices0.87472100%
2DellaVigna, Stefano and Ethan Kaplan (2007) The fox news effect: Media bias and voting0.87462100%
3Kamenica, Emir and Matthew Gentzkow (2011) Bayesian persuasion0.64422100%
4Berry, Steven, James Levinsohn, and Ariel Pakes (1995) Automobile prices in market equilibrium0.5113233%
5Bagwell, Kyle and Garey Ramey (1988) Advertising and limit pricing0.40511100%
6Dorfman, Robert and Peter O Steiner (1954) Optimal advertising and optimal quality0.40511100%
7Guerre, Emmanuel, Isabelle Perrigne, and Quang Vuong (2000) Optimal nonparametric estimation of first-price auctions0.40511100%
8Gitmez, Arda and Pooya Molavi (2018) Media capture: A bayesian persuasion approach0.40511100%
9Goeree, Michelle Sovinsky (2008) Limited information and advertising in the us personal computer industry0.40511100%
10Jun, Sung Jae and Sokbae Lee (2018) Identifying the effect of persuasion0.40511100%

Showing the top 10 of 20 scored citations.