Arbeitspapier
Inattention to rare events
The world recently experienced several rare events with disastrous consequences: the global financial crisis, the European sovereign debt crisis, and the Fukushima nuclear accident. These events have in common that key decision-makers were unprepared for them, which aggravated these events. We develop a model in which agents make state-contingent plans — prepare to act in different contingencies — subject to the constraint that agents can process only a finite amount of information. We identify the forces that make agents prepare little for some contingencies. We study whether a social planner would want agents to prepare more for rare events.
- ISBN
-
978-92-899-1654-7
- Language
-
Englisch
- Bibliographic citation
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Series: ECB Working Paper ; No. 1841
- Classification
-
Wirtschaft
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Central Banks and Their Policies
Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General
- Subject
-
disasters
efficiency
rare events
rational inattention
- Event
-
Geistige Schöpfung
- (who)
-
Maćkowiak, Bartosz
Wiederholt, Mirko
- Event
-
Veröffentlichung
- (who)
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European Central Bank (ECB)
- (where)
-
Frankfurt a. M.
- (when)
-
2015
- Handle
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Maćkowiak, Bartosz
- Wiederholt, Mirko
- European Central Bank (ECB)
Time of origin
- 2015
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