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Choice Overload and Asymmetric Regret

Author

Listed:
  • Gökhan Buturaky

    (Freelance Researcher)

  • Özgür Evren

    (New Economic School)

Abstract

We propose a model of "choice overload" which refers to a stronger tendency to select the default option in larger choice problems. Our main finding is a behavioral characterization of an asymmetric regret representation that depicts a decision maker who does not consider the possibility of experiencing regret for choosing the default option. By contrast, the value of ordinary alternatives is subject to regret. The calculus of regret for ordinary alternatives is identical to that in Sarver's (2008) anticipated regret model, despite the fact that the primitives of the two theories are different. Our model can also be applied to choice problems with the option to defer the decision.

Suggested Citation

  • Gökhan Buturaky & Özgür Evren, 2016. "Choice Overload and Asymmetric Regret," Working Papers w0235, Center for Economic and Financial Research (CEFIR).
  • Handle: RePEc:cfr:cefirw:w0235
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    References listed on IDEAS

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    Cited by:

    1. Gerasimou, Georgios & Papi, Mauro, 2015. "Oligopolistic Competition with Choice-Overloaded Consumers," MPRA Paper 68509, University Library of Munich, Germany.
    2. Dean, Mark & Kıbrıs, Özgür & Masatlioglu, Yusufcan, 2017. "Limited attention and status quo bias," Journal of Economic Theory, Elsevier, vol. 169(C), pages 93-127.
    3. Georgios Gerasimou, 2018. "Indecisiveness, Undesirability and Overload Revealed Through Rational Choice Deferral," Economic Journal, Royal Economic Society, vol. 128(614), pages 2450-2479, September.
    4. Marx, Benjamin M. & Turner, Lesley J., 2020. "Paralysis by analysis? Effects of information on student loan take-up," Economics of Education Review, Elsevier, vol. 77(C).
    5. Felix Klimm & Martin G. Kocher & Timm Optiz & Simeon Andreas Dermot Schudy, 2021. "Time Pressure and Regret in Sequential Search," CESifo Working Paper Series 9122, CESifo.
    6. Mihm, Maximilian & Ozbek, Kemal, 2018. "Mood-driven choices and self-regulation," Journal of Economic Theory, Elsevier, vol. 176(C), pages 727-760.
    7. Georgios Gerasimou, 2020. "The Decision-Conflict Logit," Papers 2008.04229, arXiv.org, revised Jun 2021.
    8. Gerasimou, Georgios & Papi, Mauro, 2018. "Duopolistic competition with choice-overloaded consumers," European Economic Review, Elsevier, vol. 101(C), pages 330-353.

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    More about this item

    Keywords

    Choice overload; anticipated regret; subjective states; choice deferral;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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