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:
- Christopher F. Chabris & David Laibson & Carrie L. Morris & Jonathon P. Schuldt & Dmitry Taubinsky, 2009. "The Allocation of Time in Decision-Making," Journal of the European Economic Association, MIT Press, MIT Press, vol. 7(2-3), pages 628-637, 04-05.
- C0 - Mathematical and Quantitative Methods - - General
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D03 - Microeconomics - - General - - - Behavioral Microeconomics; Underlying Principles
- D87 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Neuroeconomics
- D9 - Microeconomics - - Intertemporal Choice
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- Xavier Gabaix & David Laibson & Guillermo Moloche & Stephen Weinberg, 2005. "Information Acquisition: Experimental Analysis of a Boundedly Rational Model," Levine's Bibliography, UCLA Department of Economics 666156000000000480, UCLA Department of Economics.
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- Schotter, Andrew & Trevino, Isabel, 2014. "Is response time predictive of choice? An experimental study of threshold strategies," Discussion Papers, Research Unit: Economics of Change, Social Science Research Center Berlin (WZB) SP II 2014-305, Social Science Research Center Berlin (WZB).
- Dziewulski, Pawel, 2014. "Revealed time-preference," MPRA Paper, University Library of Munich, Germany 56596, University Library of Munich, Germany.
- Sacha Bourgeois-Gironde & Itzhak Aharon, 2011. "From Neuroeconomics to Genetics: The Intertemporal Choices Case as an Example," Post-Print, HAL ijn_00713466, HAL.
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