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Elusive optima: A process tracing analysis of procedural rationality in mobile phone connection plan choices

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  • Earl, Peter E.
  • Friesen, Lana
  • Shadforth, Christopher

Abstract

This paper reports an experiment in which subjects were rewarded on the basis of how close they came to finding the cheapest mobile phone plan to serve a particular usage remit by searching freely in the Internet. During the task, subjects were required to ‘think aloud’ and recordings were made of what they said and what they did on their computer screens. Analysis of the screen-capture movie recordings revealed major shortfalls in procedural rationality, including poor strategic thinking about how to deal with choice overload, poor conceptual understanding of mobile phone plans and pricing systems, as well as cognitive and calculation errors. Our novel method leads to a very different policy focus from that implied by viewing the problem in terms of excess information per se and irrationality as driven by innate heuristics and biases.

Suggested Citation

  • Earl, Peter E. & Friesen, Lana & Shadforth, Christopher, 2019. "Elusive optima: A process tracing analysis of procedural rationality in mobile phone connection plan choices," Journal of Economic Behavior & Organization, Elsevier, vol. 161(C), pages 303-322.
    • Handle: RePEc:eee:jeborg:v:161:y:2019:i:c:p:303-322
    DOI: 10.1016/j.jebo.2019.03.021
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    References listed on IDEAS

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    Cited by:

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    2. Griffin, Míde & Lyons, Sean & Mohan, Gretta & Joseph, Merin & Domhnaill, Ciarán Mac & Evans, John, 2022. "Intra-operator mobile plan switching: Evidence from linked survey and billing microdata," Telecommunications Policy, Elsevier, vol. 46(7).

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    More about this item

    Keywords

    Consumer capabilities; Choice overload; Procedural rationality; Process tracing;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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