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Patience Versus Decisiveness in Decision-Making

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Author Info

  • W. Bentley MacLeod

    (Columbia University)

  • Mark Pingle

    () (Department of Economics, University of Nevada, Reno)

Abstract

When rationality is bounded, a variety of factors may influence how far a choice is from optimal. We examine the willingness to search among alternatives. We find fixed individual differences in this temperament measure. People may be usefully typed according to how they obtain improved choices. More patient subjects obtain improvement by effectively using decision resources, performing better when the decision is more complex. More decisive subjects obtain improvement by conserving valuable decision resources, performing better when the decision problem is simple. We find that a bonus incentive frame encourages patience, while a penalty frame encourages decisiveness. These results suggest an organization can enhance its performance by matching individual temperaments and incentive frames to decision tasks at hand.

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File URL: http://www.business.unr.edu/econ/wp/papers/UNRECONWP07004.pdf
File Function: First version, 2007
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Bibliographic Info

Paper provided by University of Nevada, Reno, Department of Economics & University of Nevada, Reno , Department of Resource Economics in its series Working Papers with number 07-004.

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Length: 25 pages
Date of creation: Aug 2007
Date of revision:
Handle: RePEc:unr:wpaper:07-004

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Related research

Keywords: framing; deliberation cost; bounded rationality; heuristics; incentives;

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  1. Herbert Simon & Lindsay McSweeney, 2010. "A Behavioral Model of Rational Choice," CPI Journal, Competition Policy International, vol. 6.
  2. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working papers 98-7, Massachusetts Institute of Technology (MIT), Department of Economics.
  3. John List & David Reiley, 2008. "Field experiments," Artefactual Field Experiments 00091, The Field Experiments Website.
  4. Amos Tversky & Daniel Kahneman, 1979. "Prospect Theory: An Analysis of Decision under Risk," Levine's Working Paper Archive 7656, David K. Levine.
  5. MacLeod, W. Bentley & Pingle, Mark, 2005. "Aspiration uncertainty: its impact on decision performance and process," Journal of Economic Behavior & Organization, Elsevier, vol. 56(4), pages 617-629, April.
  6. Conlisk, John, 1988. "Optimization cost," Journal of Economic Behavior & Organization, Elsevier, vol. 9(3), pages 213-228, April.
  7. Falk, Armin & Fehr, Ernst, 2003. "Why labour market experiments?," Labour Economics, Elsevier, vol. 10(4), pages 399-406, August.
  8. W. Bentley MacLeod, 2002. "Complexity, Bounded Rationality and Heuristic Search," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 0(1), pages 8.
  9. Harrison, Glenn W & Morgan, Peter, 1990. "Search Intensity in Experiments," Economic Journal, Royal Economic Society, vol. 100(401), pages 478-86, June.
  10. Tversky, Amos & Kahneman, Daniel, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, MIT Press, vol. 106(4), pages 1039-61, November.
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