In this dissertation, I examine the impact of uncertainty and information processing restrictions on standard economic models. Chapter 1 examines a reevaluation of the excess volatility puzzle in asset prices by assessing the impact of a shift in the agent's focus from minimizing average loss to minimizing maximum loss. Chapters 2 and 3 extend and clarify the newly developing arena of economic models in which the agent's capacity for information processing is systematically limited, as in the recent rational inattention literature. Chapter 1, which represents joint work with Charles Whiteman, studies the consequences changing the present value formula for stock prices. In place of the squared-error-loss minimizing expected present value of future dividends, we use a predictor optimal for the min-max preference relationship appropriate in cases of ambiguity. With ``robust" predictions, the well-known variance bound is reversed in that prices are predicted to be far more volatile than what is observed. We also investigate an intermediate ``partially robust'' case in which the degree of ambiguity is limited, and discover that such an intermediate model cannot be rejected in favor of an unrestricted time series model. Chapter 2 demonstrates the properties and solutions for the more general two-period rational inattention model. We show that the problem is convex, can be solved in seconds, and highlights several important features of information-processing-capacity-constrained models. Additionally, we show the importance of deriving, rather than assuming, the form of the final solution in rational inattention models. Chapter 3 extends the work of Chapter 2 to a finite-horizon dynamic setting by creating a structure in which distributional state and control variables interact under information-processing constraints. Limited information processing capacity is used optimally, and agents have the opportunity to trade processing capacity for higher expected future income. The framework is applied to the canonical life-cycle model of consumption and saving, and an analysis of the impact of preference parameters on optimal attention allocation is conducted. The model produces a distinct hump-shaped profile in expected consumption.

The present study examined the direction and strength of the relation between three different areas academic achievement and working memory with adolescent students. The data analyzed included ratings for inattention, a diagnosis of ADHD (or not), and demographic information for race/ethnicity. Fifty children aged 11 to16 years of age participated in the study. Participants were recruited from several middle schools, homeschooling networks, and churches from a southeastern state of the United States. Each participant completed a standardized achievement test, a behavioral rating scale, and visual and verbal working memory tests. The research questions investigated: 1) the relation between visual and verbal working memory with each of three areas of academic achievement; 2) whether the relation between visual and verbal working memory was strengthened or moderated by inattention. Results found that verbal-auditory working memory (p=p=p=.01). There was a positive relation between the working memory scores and academic achievement, with higher working memory scores predicting higher academic achievement. Due to significant differences with the standardized testing scores between Caucasians and non-Caucasians, the analysis was controlled for ethnicity. The measure of inattention problems did not add significantly to or moderate the prediction of academic achievement by visual or verbal working memory after controlling for ethnicity. Future recommendations included research to support students with low working memory skills and to examine the cultural sensitivity of the working memory batteries.

<p>Previous research has shown both positive and negative effects of gaming on academic and cognitive performance. The purpose of this study was to assess the effect of gaming on development of working memory (WM), inattention, reading and math ability using a longitudinal design. A randomly chosen sample of 335 (168 girls) 6–25 year olds performed tests of visuo-spatial and verbal WM, reading and math ability twice, with a two year interval. Gaming and inattention were assed with questionnaires. Time spent gaming did not affect development of any of the variables. However, game category did correlate with development of visuo-spatial WM, with action-gamers having a more favourable development. There was, however, no positive interaction with more time spent gaming for action-gamers. These results suggest that gaming should not be regarded as a damaging leisure activity. There could instead be some positive effects of gaming, but future research should try to identify the aspects of gaming contributing to this effect.</p>

This study examined written expression skills in children with attention problems with and without word reading difficulties. The sample consisted of 28 children with attention problems (AP) only, 18 children with coexisting attention and reading problems (ARP), and 34 children without attention or word reading difficulties (TYP). Curriculum-based measurement (CBM) indices of accuracy and fluency, plus teacher ratings of handwriting, spelling, and overall writing skills were used to assess children’s written expression skills. The analyses indicated that the AP and ARP groups received significantly lower scores on all measures of written expression than the TYP group. The ARP group scored significantly lower than the AP group on the teacher ratings of writing and spelling. These findings suggest that inattention is significantly related to written expression difficulties independent of word-reading skills.

This study examined written expression skills in children with attention problems with and without word reading difficulties. The sample consisted of 28 children with attention problems (AP) only, 18 children with coexisting attention and reading problems (ARP), and 34 children without attention or word reading difficulties (TYP). Curriculum-based measurement (CBM) indices of accuracy and fluency, plus teacher ratings of handwriting, spelling, and overall writing skills were used to assess children’s written expression skills. The analyses indicated that the AP and ARP groups received significantly lower scores on all measures of written expression than the TYP group. The ARP group scored significantly lower than the AP group on the teacher ratings of writing and spelling. These findings suggest that inattention is significantly related to written expression difficulties independent of word-reading skills.

Previous research has shown that individuals endorsing inattention and hyperactivity-impulsivity have deficient performance on tasks tapping different aspects of attention. Although there is empirical evidence suggesting that the behavioral domains of inattention and hyperactivity-impulsivity are linked to functioning of independent and separate brain areas and neurotransmitter systems, cognitive characterization of adults presenting with problems within these domains is not complete. The aim for this study was to identify the cognitive correlates of the core behavioral domains that define the diagnosis of AD/HD (i.e., inattention and hyperactivity-impulsivity) in a sample of college students, utilizing a computerized attention task, the Attention Network Test (ANT). Different ANT task components have been found to activate separate brain areas linked to the functioning of alerting, orienting and executive attention, and have the potential to provide an indication of the efficiency of these brain networks. In addition to completing the ANT, the participants filled out questionnaires covering common symptoms of adult AD/HD, anxiety and depression. Hierarchical regression analyses revealed that there were no reliable relationships between self-reported symptoms of current inattention and hyperactivity-impulsivity and ANT performance. Further, self-reported depression and/or anxiety did not seem to impact the efficiency of attention networks to a significant degree in this study sample. Gender proved to be the most consistent predictor of ANT performance. Female gender was related to poorer executive attention efficiency. An exploratory ANCOVA revealed that individuals reporting high levels of impulsivity and emotional lability had poorer executive attention efficiency in comparison to those reporting these behaviors and problems to a lesser extent. Future research is needed in order to further explore the relationship between ANT performance and behavioral expressions of adult AD/HD and other neurological and psychiatric conditions.

Previous research has shown both positive and negative effects of gaming on academic and cognitive performance. The purpose of this study was to assess the effect of gaming on development of working memory (WM), inattention, reading and math ability using a longitudinal design. A randomly chosen sample of 335 (168 girls) 6–25 year olds performed tests of visuo-spatial and verbal WM, reading and math ability twice, with a two year interval. Gaming and inattention were assed with questionnaires. Time spent gaming did not affect development of any of the variables. However, game category did correlate with development of visuo-spatial WM, with action-gamers having a more favourable development. There was, however, no positive interaction with more time spent gaming for action-gamers. These results suggest that gaming should not be regarded as a damaging leisure activity. There could instead be some positive effects of gaming, but future research should try to identify the aspects of gaming contributing to this effect.

Mémoire numérisé par la Division de la gestion de documents et des archives de l'Université de Montréal

Heterogeneity in children with Attention Deficit Hyperactivity Disorder (ADHD) symptoms is a well-known phenomenon. Empirically, this heterogeneity is evident in at least three different respects: expression of the two ADHD symptom domains (hyperactivity/impulsivity and inattention), neuropsychological impairments, and comorbid behavior problems. The major aim of the present thesis was to examine the heterogeneity characterizing children with ADHD symptoms to enhance our understanding by examining neuropsychological factors with regard to common and independent contributions, and specificity of the two ADHD symptom domains in relation to neuropsychological factors and comorbid behavioral problems. Particular emphasis is placed on prominent neuropsychological processes such as executive functions, state regulation and delay aversion. The present thesis is based on findings from four studies on community-based samples of children – studies involving concurrent and longitudinal designs as well as both categorical and dimensional approaches. Results provide support for the notion that executive function and state regulation, but not delay aversion, constitute independent pathways to ADHD, primarily to symptoms of inattention. However, delay aversion was shown to have an effect in combination with state regulation on both hyperactivity/impulsivity and inattention. Additionally, symptoms of hyperactivity/impulsivity and inattention have different primary correlates concerning neuropsychological factors and comorbidity. More specifically, executive function, state regulation, internalizing problems and academic achievement were specifically related to inattention but not to hyperactivity/impulsivity. Oppositional Defiant Disorder (ODD) was specifically related to hyperactivity/impulsivity, but not to inattention. The present thesis has contributed with important and new knowledge about the heterogeneity of children with ADHD symptoms concerning neuropsychological pathways, and specificity of the two ADHD symptom domains in relation to neuropsychological factors and comorbid behavioral problems. Knowledge such as this can help us understand how to identify more homogeneous ADHD subgroups, and contribute to the further development of multiple pathway models within this area of research.

In this thesis, we study Bayesian games with two players and two actions (2 by 2 games) in realistic settings where private information is correlated or players have scarcity of attention. The contribution of this thesis is to shed further light on strategic interactions in realistic settings. Chapter 1 gives an introduction of the research and contributions of this thesis. In Chapter 2, we study how the correlation of private information affects rational agents’ choice in a symmetric game of strategic substitutes. The game we study is a static 2 by 2 entry game. Private information is assumed to be jointly normally distributed. The game can, for some parameter values, be solved by a cutoff strategy: that is enter if the private payoff shock is above some cutoff value and do not enter otherwise. Chapter 2 shows that there is a restriction on the value of correlation coefficient such that the game can be solved by the use of cutoff strategies. In this strategic-substitutes game, there are two possibilities. When the game can be solved by cutoff strategies, either, the game exhibits a unique (symmetric) equilibrium for any value of correlation coefficient; or, there is a threshold value for the correlation coefficient such that there is a unique (symmetric) equilibrium if the correlation coefficient is below the threshold, while if the correlation coefficient is above the threshold value, there are three equilibria: a symmetric equilibrium and two asymmetric equilibria. To understand how parameter changes affect players’ equilibrium behaviour, a comparative statics analysis on symmetric equilibrium is conducted. It is found that increasing monopoly profit or duopoly profit encourages players to enter the market, while increasing information correlation or jointly increasing the variances of players’ prior distribution will make players more likely to choose entry if the equilibrium cutoff strategies are below the unconditional mean, and less likely to choose entry if the current equilibrium cutoff strategies are above the unconditional mean. In Chapter 3, we study a 2 by 2 entry game of strategic complements in which players’ private information is correlated. As in Chapter 2, the game is symmetric and private information is modelled by a joint normal distribution. We use a cutoff strategy as defined in Chapter 2 to solve the game. Given other parameters, there exists a critical value of the correlation coefficient. For correlation coefficient below this critical value, cutoff strategies cannot be used to solve the game. We explore the number of equilibria and comparative static properties of the solution with respect to the correlation coefficient and the variance of the prior distribution. As the correlation coefficient changes from the lowest feasible (such that cutoff strategies are applicable) value to one, the sequence of the number of equilibrium will be 3 to 2 to 1, or 3 to 1. Alternatively, under some parameter specifications, the game exhibits a unique equilibrium for all feasible value of the correlation coefficient. The comparative statics of equilibrium strategies depends on the sign of the equilibrium cutoff strategies and the equilibrium’s stability. We provide a necessary and sufficient condition for the existence of a unique equilibrium. This necessary and sufficient condition nests the sufficient condition for uniqueness given by Morris and Shin (2005). Finally, if the correlation coefficient is negative for the strategic-complements games or positive for the strategic-substitutes games, there exists a critical value of variance such that for a variance below this threshold, the game cannot be solved in cutoff strategies. This implies that Harsanyi’s (1973) purification rationale, supposing the perturbed games are solved by cutoff strategies and the uncertainty of perturbed games vanishes as the variances of the perturbation-error distribution converge to zero, cannot be applied for a strategic-substitutes (strategic-complements) game with dependent perturbation errors that follow a joint normal distribution if the correlation coefficient is positive (negative). However, if the correlation coefficient is positive for the strategic-complements games or negative for the strategic-substitutes games, the purification rationale is still applicable even with dependent perturbation errors. There are Bayesian games that converge to the underlying complete information game as the perturbation errors degenerate to zero, and every pure strategy Bayesian Nash equilibrium of the perturbed games will converge to the corresponding Nash equilibrium of the complete information game in the limit. In Chapter 4, we study how scarcity of attention affects strategic choice behaviour in a 2 by 2 incomplete information strategic-substitutes entry game. Scarcity of attention is a common psychological characteristic (Kahneman 1973) and it is modelled by the rational inattention approach introduced by Sims (1998). In our game, players acquire information about their own private payoff shocks (which here follows a high-low binary distribution) at a cost. We find that, given the opponent’s strategy, as the unit cost of information acquisition increases a player’s best response will switch from acquiring information to simply comparing the ex-ante expected payoff of each action (using the player’s prior). By studying symmetric Bayesian games, we find that scarcity of attention can generate multiple equilibria in games that ordinarily have a unique equilibrium. These multiple equilibria are generated by the information cost. In any Bayesian game where there are multiple equilibria, there always exists one pair of asymmetric equilibria in which at least one player plays the game without acquiring information. The number of equilibria differs with the value of the unit information cost. There can be 1, 5 or 3 equilibria. Increasing the unit information cost could encourage or discourage a player from choosing entry. It depends on whether the prior probability of a high payoff shock is greater or less than some threshold value. We compare the rational inattention Bayesian game with a Bayesian quantal response equilibrium game where the observation errors are additive and follow a Type I extreme value distribution. A necessary and sufficient condition is established such that both the rational inattention Bayesian game and quantal response game have a common equilibrium.