(Ir)rationally Inattentive

Abstract

Consumer attention is a limited resource, and various research streams have attempted to explain what attracts or fails to attract it. One research stream has shown that consumers attend to relevant information and ignore less relevant information based on the costs and benefits of acquiring the information. Another stream has shown that consumers avoid relevant information to reduce negative emotions or justify self-serving or impulsive desires. We present a model that reconciles these contradictory findings. We assume that consumers have limited attentional resources and cognitive skills and demonstrate why, under these assumptions, it is ecologically rational to sometimes attend to and sometimes avoid relevant information depending on trade-offs in the choice environment. The model makes novel predictions about how choice architecture can help reduce information avoidance.