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

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Kai Duttle & Keigo Inukai, 2015. "Complexity Aversion: Influences of Cognitive Abilities, Culture and System of Thought," Economics Bulletin, AccessEcon, vol. 35(2), pages 846-855.
    • Handle: RePEc:ebl:ecbull:eb-15-00065
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    References listed on IDEAS

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    Cited by:

    1. Lau Lilleholt, 2019. "Cognitive ability and risk aversion: A systematic review and meta analysis," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(3), pages 234-279, May.
    2. repec:ers:journl:v:xxiv:y:2021:i:4b:p:108-119 is not listed on IDEAS
    3. Kops, Christopher & Pasichnichenko, Illia, 2023. "Testing negative value of information and ambiguity aversion," Journal of Economic Theory, Elsevier, vol. 213(C).
    4. Aleksandra Staniszewska & Monika Czerwonka & Krzysztof Kompa, 2020. "Rational Behavior of Dictators - Evidence on Gender and Religiosity," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 26(3), pages 289-301, August.
    5. Aleksandra Staniszewska & Monika Czerwonka & Krzysztof Kompa, 2021. "The Impact of Religiosity and Gender on Reflective and Intuitive Thinking – The Case of Poland," European Research Studies Journal, European Research Studies Journal, vol. 0(4 - Part ), pages 108-119.
    6. Shashank Kathpal & Asif Akhtar & Syed Khusro Chishty & Farrukh Rafiq, 2025. "Risk Perception as a Predictor of Heuristic Biases: The Role of Sex and Age," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 32(3), pages 1077-1098, September.
    7. Czerwonka Monika, 2017. "Anchoring and Overconfidence: The Influence of Culture and Cognitive Abilities," International Journal of Management and Economics, Warsaw School of Economics, Collegium of World Economy, vol. 53(3), pages 48-66, September.

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    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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