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Complexity Aversion: Influences of Cognitive Abilities, Culture and System of Thought

Listed author(s):
  • Kai Duttle

    ()

    (Institute of East Asian Studies, Mercator School of Management, University of Duisburg-Essen)

  • Keigo Inukai

    ()

    (Institute of Social and Economic Research, Osaka University)

Complexity aversion describes the preference of decision makers for less complex options that cannot be explained by expected utility theory. While a number of research articles investigate the effects of complexity on choices, up to this point there exist only theoretical approaches aiming to explain the reasons behind complexity aversion. This paper presents two experimental studies that aim to fill this gap. The first study considers subjects' cognitive abilities as a potential driver of complexity aversion. Cognitive skills are measured in a cognitive reflection test and, in addition, are approximated by subjects' consistency of choices. In opposition to our hypothesis, subjects with higher cognitive skills display stronger complexity aversion compared to their peers. The second study deals with cultural background. The experiment was therefore conducted in Germany and in Japan. German subjects prefer less complex lotteries while Japanese are indifferent regarding choice complexity.

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File URL: http://www.accessecon.com/Pubs/EB/2015/Volume35/EB-15-V35-I2-P88.pdf
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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 35 (2015)
Issue (Month): 2 ()
Pages: 846-855

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Handle: RePEc:ebl:ecbull:eb-15-00065
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