We introduce an information provision experiment into a standard dynamic rational inattention model. We derive analytical results about how the treatment effect varies with characteristics of the environment and the individual. We use these results to discuss findings in the empirical literature on information provision experiments that can be explained by rational inattention of survey respondents and what this interpretation implies about behavior outside the survey. (JEL C90, D83, D91)

We build a model of optimal fixed-rate mortgage refinancing with fixed costs and inattention and derive a new sufficient statistic that can be used to measure inattention frictions from simple moments of the rate gap distribution. In the model, borrowers pay attention to rates sporadically, so they often fail to refinance even when it is profitable. When paying attention, borrowers optimally choose to refinance earlier than under a perfect attention benchmark. Our model can rationalize almost all errors of “omission” (refinancing too slowly) and a large fraction of the errors of “commission” (refinancing too quickly) previously documented in the data. (JEL D91, G41, G51)

Imperfect competition in labor markets can lead to efficiency losses and lower aggregate output. This paper examines how variations in labor market competitiveness may account for differences in GDP per capita among countries. By structurally estimating an oligop-sony model with free entry across different development stages, we find that labor market power increases with GDP per capita. Wage markdowns vary from 54 percent in low-income countries to around 24 percent in the richest ones. If labor markets in poorer countries were as competitive as in more developed ones, their output per capita could rise by up to 44 percent. (JEL E23, J22, J31, J42, L13, L25, O47)

An agent acquires information dynamically until her belief about a binary state reaches an upper or lower threshold. She can choose any signal process subject to a constraint on the rate of entropy reduction. Strategies are ordered by “time risk”—the dispersion of the distribution of threshold-hitting times. We construct a strategy maximizing time risk (Greedy Exploitation) and one minimizing it (Pure Accumulation). Under either, beliefs follow a compensated Poisson process. In the former, beliefs jump to the threshold closer in Bregman divergence. In the latter, beliefs jump to the unique point with the same entropy as the current belief. (JEL D81, D82, D83)

We construct a new dataset to show that successful entrants in the consumer food sector build market share by adding new customers. Entrants reach new customers by entering more geographical markets, placing their product in more stores in these markets, and, for a positively selected subset of firms, advertising directly to customers. These activities are costly and are associated with persistent increases in quantities, but there are no differences in markups between new and mature markets. This confirms a central role for marketing and advertising in overcoming demand-side frictions that slow firm growth. (JEL D24, D25, L11, L25, L81, M13, M37)

We consider a broad class of spatial models where there are many types of interactions across a large number of locations. We provide a new theorem that offers an iterative algorithm for calculating an equilibrium and sufficient and “globally necessary” conditions under which the equilibrium is unique. We show how this theorem enables the characterization of equilibrium properties for one important spatial system: an urban model with spillovers across a large number of different types of agents. An online appendix provides 12 additional examples of both spatial and nonspatial economic frameworks for which our theorem provides new equilibrium characterizations. (JEL C21, R15, R23)

We study how choice quality relates to socioeconomic factors, using population-wide data on health insurance choices and utilization in the Netherlands. We document a striking choice quality gradient with respect to socioeconomic status, finding that those with higher income, higher education, and training in quantitative fields make meaningfully better choices. Household income for the top 5 percent of decision-makers, in terms of surplus captured, is almost three times higher than for the bottom 5 percent. When jointly including all factors, education degree and field of study are more important predictors of choice quality than income and other financial variables. (JEL D31, G22, G52, I13, L15)

Wage garnishment allows creditors to deduct money from workers’ paychecks to repay defaulted debts. We document new facts about wage garnishment between 2014 and 2019 using data from a large payroll processor that distributes paychecks to approximately 20 percent of US private-sector workers. By 2019, over 1 in every 100 workers was being garnished for delinquent debt. The average garnished worker experiences garnishment for five months, during which approximately 11 percent of gross earnings is remitted to their creditor(s). The beginning of a garnishment is associated with an increase in job turnover but no intensive margin change in hours worked. (JEL G51, J22, J63)