Rationally Inattentive Behaviour with A Priori Knowledge

Abstract

Purpose: To contribute to the discussion on the importance of the sense of fairness in the decision-making process according to the theory of rational inattention. Design: The study is based on an experiment where economically educated respondents state and justify the price at which they are willing to provide and accept help in an emergency. Findings: Most of the respondents are willing to provide and accept help. For the assistance provided, most would demand a significantly lower price than the maximum economic return defined by the known value of the commercial service. The respondents were repeatedly willing to pass on the pricing decision to the counterparty. Practical Implications: This behaviour in decision-making processes represents non-inclusion of a sufficient a priori knowledge as a determining factor in the selection of variants, which is a limitation in the cognitively limited modelling of economic subjects. Originality/Value: The results are based on the original experiment as an empirical basis and it is valuable because of the lack of experimental research in this domain. Limitations include the relatively small sample of respondents and, in terms of generalising the results, that they were students at a university of economics. JEL: D01, D11, D12, D14