Random Attention and Unobserved Reference Alternatives

Abstract

In this paper, I develop and characterize two models of random attention that differ from each other with respect to the menu-dependence of the unobserved reference alternatives. In both models, the decision-maker pays attention to subsets of the available set of alternatives randomly with the reference alternatives being always paid attention to. Under menu-dependence, partial identification of both the reference alternatives and the underlying preferences is provided. For the case of multiple menu-independent references, I provide a complete identification of the references and a coarse identification of the underlying preferences. A complete identification of the latter is provided when the independent random attention function is considered.