• Corpus ID: 17241886

Costly Information Processing and Income Expectations

@inproceedings{Gutknecht2014CostlyIP,
  title={Costly Information Processing and Income Expectations},
  author={Daniel Gutknecht and Stefan Hoderlein and Michael Peters},
  year={2014}
}
Do individuals use all information at their disposal when forming expectations about future events? In this paper we present an econometric framework to answer this question. We show how individual information sets can be characterized by simple nonparametric exclusion restrictions and provide a quantile based test for costly information processing. In particular, our methodology does not require individuals' expectations to be rational, and we explicitly allow for individuals to have access to… 
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