The Allocation of Time in Decision-Making
AbstractWe study the allocation of time across decision problems. If a decision-maker (1) has noisy estimates of value, (2) improves those estimates the longer he or she analyzes a choice problem, and (3) allocates time optimally, then the decision-maker should spend less time choosing when the difference in value between two options is relatively large. To test this prediction we ask subjects to make 27 binary incentive-compatible intertemporal choices, and measure response time for each decision. Our time allocation model explains 54% of the variance in average decision time. These results support the view that decisionmaking is a cognitively costly activity that uses time as an input allocated according to cost-benefit principles.
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Bibliographic InfoPaper provided by Harvard University Department of Economics in its series Scholarly Articles with number 4481495.
Date of creation: 2009
Date of revision:
Publication status: Published in Journal- European Economic Association
Other versions of this item:
- C0 - Mathematical and Quantitative Methods - - General
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D03 - Microeconomics - - General - - - Behavioral Economics; Underlying Principles
- D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
- D9 - Microeconomics - - Intertemporal Choice and Growth
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- 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.
- 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.
- Sacha Bourgeois-Gironde & Itzhak Aharon, 2011. "From Neuroeconomics to Genetics: The Intertemporal Choices Case as an Example," Post-Print ijn_00713466, HAL.
- Ariel Rubenstein, 2013. "Response time and decision making: An experimental study," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 8(5), pages 540-551, September.
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