World Scientific
Skip main navigation

Cookies Notification

We use cookies on this site to enhance your user experience. By continuing to browse the site, you consent to the use of our cookies. Learn More
×

System Upgrade on Tue, May 28th, 2024 at 2am (EDT)

Existing users will be able to log into the site and access content. However, E-commerce and registration of new users may not be available for up to 12 hours.
For online purchase, please visit us again. Contact us at customercare@wspc.com for any enquiries.

Lecture 8: Posterior-Separable Cost Functions and Behavior

      https://doi.org/10.1142/9789811262395_0008Cited by:0 (Source: Crossref)
      Abstract:

      In this lecture, I introduce and analyze behavioral patterns associated with a large and important family of attention cost functions. Costs based on Shannon entropy introduced into economics by Sims opened the door. In this lecture, I introduce this cost function and indicate some of the many reasons why generalizations are being explored. In a nutshell, the model has properties that are often contradicted in data. With that in mind, I introduce some seemingly natural generalizations that share a key property of the Shannon model, which is posterior separability: Costs are additive in nature in a particular sense. These are now well studied due to their allowing for most observed empirical failings of the Shannon model…