@techreport{Reis2004Inattentive,
abstract = {This paper studies the consumption decisions of agents who face costs of acquiring, absorbing
and processing information. These consumers rationally choose to only sporadically update their
information and re-compute their optimal consumption plans. In between updating dates, they
remain inattentive. This behavior implies that news disperses slowly throughout the population,
so events have a gradual and delayed effect on aggregate consumption. The model predicts that
aggregate consumption adjusts slowly to shocks, and is able to explain the excess sensitivity
and excess smoothness puzzles. In addition, individual consumption is sensitive to ordinary and
unexpected past news, but it is not sensitive to extraordinary or predictable events. The model
further predicts that some people rationally choose to not plan, live hand-to-mouth, and save
less, while other people sporadically update their plans. The longer are these plans, the more
they save. Evidence using U.S. aggregate and microeconomic data generally supports these
predictions.},
author = {Ricardo Reis},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {D1; E2; D9; D8; 330; Konsumentenverhalten; Informationsverhalten; Gesamtwirtschaftlicher Konsum; Theorie; USA},
language = {eng},
number = {232},
title = {Inattentive Consumers},
type = {Discussion papers in economics / Princeton University, Woodrow Wilson School of Public and International Affairs},
url = {http://hdl.handle.net/10419/23459},
year = {2004}
}
