Discrete Choice and Rational Inattention: A General Equivalence Result

This note establishes a general equivalence between discrete choice and rational inattention models. We exploit convex-analytic properties of these models to show that the choice probabilities emerging from any additive random utility discrete choice model can be rationalized from a class of suitably generalized rational inattention models, and vice versa. Thus any discrete choice model can be given an interpretation in terms of boundedly rational behavior.