Advanced Search
MyIDEAS: Login to save this paper or follow this series

Variety Aversion and Information Overload: An Experimental Approach

Contents:

Author Info

  • Karen Kaiser

Abstract

This paper analyzes the effect of information overload on preference or aversion for variety. According to the model, a rational decision maker who suffers from information overload, faces a two-stage decision process, and is choosing from a set of unknown goods will find it optimal at some point to become variety averse. To test this hypothesis, an experiment is conducted, and its results, that subjects suffering from information overload use variety aversion as a strategy to deal with their cognitive limitations, are consistent with the model. Moreover, results suggest that subjects are, on the average, choosing the optimal number of goods. As the price of the goods increases, subjects become more variety averse. In addition, as they become more experienced, they prefer larger sets of goods.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.banxico.org.mx/publicaciones-y-discursos/publicaciones/documentos-de-investigacion/banxico/%7B880F5DD7-D378-692E-945A-7313483BA70A%7D.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Banco de México in its series Working Papers with number 2011-01.

as in new window
Length:
Date of creation: May 2011
Date of revision:
Handle: RePEc:bdm:wpaper:2011-01

Contact details of provider:
Web page: http://www.banxico.org.mx
More information through EDIRC

Related research

Keywords: Variety aversion; information overload; bounded rationality; decision making; laboratory experiment.;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Vincent P. Crawford & Miguel A. Costa-Gomes, 2006. "Cognition and Behavior in Two-Person Guessing Games: An Experimental Study," American Economic Review, American Economic Association, vol. 96(5), pages 1737-1768, December.
  2. Jacoby, Jacob, 1984. " Perspectives on Information Overload," Journal of Consumer Research, University of Chicago Press, vol. 10(4), pages 432-35, March.
  3. Xavier Gabaix & David Laibson & Guillermo Moloche & Stephen Weinberg, 2005. "Information Acquisition: Experimental Analysis of a Boundedly Rational Model," Levine's Bibliography 666156000000000480, UCLA Department of Economics.
  4. Herbert Simon & Lindsay McSweeney, 2010. "A Behavioral Model of Rational Choice," CPI Journal, Competition Policy International, vol. 6.
  5. Scammon, Debra L, 1977. " "Information Load" and Consumers," Journal of Consumer Research, University of Chicago Press, vol. 4(3), pages 148-55, December.
  6. Klaus Wertenbroch, 1998. "Consumption Self-Control by Rationing Purchase Quantities of Virtue and Vice," Marketing Science, INFORMS, vol. 17(4), pages 317-337.
  7. Xavier Gabaix & David Laibson & Guillermo Moloche & Stephen Weinberg, 2006. "Costly Information Acquisition: Experimental Analysis of a Boundedly Rational Model," American Economic Review, American Economic Association, vol. 96(4), pages 1043-1068, September.
  8. Todd Sarver, 2008. "Anticipating Regret: Why Fewer Options May Be Better," Econometrica, Econometric Society, vol. 76(2), pages 263-305, 03.
  9. Jacoby, Jacob & Speller, Donald E & Berning, Carol A Kohn, 1974. " Brand Choice Behavior as a Function of Information Load: Replication and Extension," Journal of Consumer Research, University of Chicago Press, vol. 1(1), pages 33-42, June.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Anna Conte & M. Levati, 2014. "Use of data on planned contributions and stated beliefs in the measurement of social preferences," Theory and Decision, Springer, vol. 76(2), pages 201-223, February.
  2. Karen Kaiser & Rainer Schwabe, 2011. "Preference for Variety," Working Papers 2011-13, Banco de México.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bdm:wpaper:2011-01. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dirección de Sistemas).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.