André Medeiros Sztutman.

24/03/2017

Orientador: Carlos Viana de Carvalho.

Co-orientador: Tiago Couto Berriel.

Banca: Leonardo Rezende. Felipe Iachan.

We propose a new solution for the Grossman and Stiglitz [1980] paradox. By substituting
a rational inattention restriction for their information structure, we show that prices can reflect all the information available without breaking the incentives of market participants to gather information. This model reframes the efficient market hypothesis and reconciles opposing views: prices are fully revealing but only for those who are sufficiently smart. Finally, we develop a method for postulating and solving Walrasian general equilibrium models with rationally inattentive agents circumventing previous tractability assumptions.

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