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Abstract

Dynamic choices of cognitively constrained individuals have been ascribed, by the rational inattention theory, as being a filtering problem, in which the attentional intensity is consciously elected. Human attention, however, is not merely of voluntary intensity; it is rather also of volitional placement nature. In this article, I study the implications of a dynamic theory of volitional attention describing individuals who choose among the alternatives that are induced by their attentional choices. Firstly, a consumer search application using US scanner data indicates that placement choices in retail markets are state-dependent and non-linear. Costs do not exclusively depend on the cardinality of consideration sets, but also experience and attentional associations between considered items. Neglecting, thereby, these aspects potentially leads to misidentification of product-preferences. Secondly, participation in financial markets is revisited from the perspective of volitional attention and a cultural-based argument of optimal non-participation choices is provided.

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