Attentional and Perceptual Foundations of Economic Behavior

Over the last few decades, behavioral economics has grown into one of the leading branches of economics. Yet the behavioral revolution remains incomplete. It is not yet reflected in the “core” curriculum of many departments of economics in proportion to its growth and influence, and some applied subfields of the discipline have yet to incorporate it to any great extent; little work in macroeconomics, for example, makes use of the models, methods or findings of behavioral economics. This is partly due to a perceived lack of unifying principles. But these much-needed principles can be found in theoretical and empirical research on how attention and perception shape human decision-making.

The Attentional and Perceptual Foundations of Economic Behavior project, sponsored by the Alfred P. Sloan Foundation and the NOMIS Foundation, seeks to facilitate and energize interdisciplinary research linking psychological, neural, and behavioral aspects of attention and perception with microeconomic behavior and macroeconomic outcomes.

Through a series of workshops, symposia and summer schools, the project aims to build a research community, thus accelerating the following areas of research:

  • New measurement methods linking behavior with attention. By adapting methods from psychological research to economics, researchers will be better able to evaluate their potential to improve understanding of economic behavior.
  • New theoretical foundations for behavioral biases firmly grounded in attentional constraints. Once these new measurement methods are introduced and integrated into economic analysis, more empirically guided theories can be developed that ground otherwise diverse heuristics and biases, perhaps even unifying them under newly developed theoretical frameworks.
  • Causal measurement of how attentional constraints impact behavioral biases and insecurities. We must explicitly measure and manipulate attention and perception to evaluate the causal impact of attentional and perceptual constraints on economic behavior.
  • Attentional foundations for inefficient aggregate adjustment. As an example of a more applied issue for the project’s focus, we expect to address the question of how economists should understand both apparently inefficient delays in the adjustment of people’s behavior to some kinds of changes in market conditions, and over-reaction to others.

The Sloan-NOMIS project is being led by Andrew Caplin, New York University; Ernst Fehr, University of Zurich; and Michael Woodford, Columbia University.

Workshops, symposia and summer schools

The inaugural cross-disciplinary workshop, the Sloan-NOMIS Program on Attentional and Perceptual Foundations of Economic Behavior, was held in Westchester County, NY, United States, in October 2017.

A second workshop, Sloan-NOMIS 2018 Workshop on Attention and Choice, took place at New York University in February 2018.

The 2018 Summer School on Cognitive Foundations of Economic Behavior will be held in Vitznau, Switzerland from June 29 to July 8, 2018.