• Rational Memory with Decay

  • 2022-05-09

  • Speaker: Nathaniel Neligh
  • Institution: University of Tennessee Knoxville
  • Place: Online 14:30 h
  • Event type: Weekly Seminars
  • Previous economic models of memory have failed to incorporate one of its critical features: decay. It has long been established that memories fade over time, losing fidelity. In this paper we show that a framework of rational memory with decay can produce the recency effect and other economically interesting phenomena across a wide range of economic contexts. We apply the framework to models of elections, insurance purchasing, and advertising. In these settings, the framework reproduces empirically established behaviors and produces additional insights.

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