IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/15084.html
   My bibliography  Save this paper

What Comes to Mind

Author

Listed:
  • Nicola Gennaioli
  • Andrei Shleifer

Abstract

We present a model of judgment under uncertainty, in which an agent combines data received from the external world with information retrieved from memory to evaluate a hypothesis. We focus on what comes to mind immediately, as the agent makes quick, intuitive evaluations. Because the automatic retrieval of data from memory is both limited and selected, the agent's evaluations may be severely biased. This framework can account for some of the evidence on heuristics and biases presented by Kahneman and Tversky, including conjunction and disjunction fallacies.

Suggested Citation

  • Nicola Gennaioli & Andrei Shleifer, 2009. "What Comes to Mind," NBER Working Papers 15084, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15084
    Note: AP CF
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w15084.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Joshua Schwartzstein, 2014. "Selective Attention And Learning," Journal of the European Economic Association, European Economic Association, vol. 12(6), pages 1423-1452, December.
    2. Osborne, Martin J & Rubinstein, Ariel, 1998. "Games with Procedurally Rational Players," American Economic Review, American Economic Association, vol. 88(4), pages 834-847, September.
    3. Jehiel, Philippe, 2005. "Analogy-based expectation equilibrium," Journal of Economic Theory, Elsevier, vol. 123(2), pages 81-104, August.
    4. Sendhil Mullainathan & Joshua Schwartzstein & Andrei Shleifer, 2008. "Coarse Thinking and Persuasion," The Quarterly Journal of Economics, Oxford University Press, vol. 123(2), pages 577-619.
    5. Matthew Rabin, 2002. "Inference by Believers in the Law of Small Numbers," The Quarterly Journal of Economics, Oxford University Press, vol. 117(3), pages 775-816.
    6. repec:hrv:faseco:30747159 is not listed on IDEAS
    7. Johnson, Eric J & Hershey, John & Meszaros, Jacqueline & Kunreuther, Howard, 1993. "Framing, Probability Distortions, and Insurance Decisions," Journal of Risk and Uncertainty, Springer, vol. 7(1), pages 35-51, August.
    8. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
    9. Matthew Rabin & Joel L. Schrag, 1999. "First Impressions Matter: A Model of Confirmatory Bias," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 37-82.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jehiel, Philippe, 2015. "Investment strategy and selection bias: An equilibrium perspective on overconfidence," CEPR Discussion Papers 10868, C.E.P.R. Discussion Papers.
    2. Ignacio Esponda & Demian Pouzo, 2017. "Conditional Retrospective Voting in Large Elections," American Economic Journal: Microeconomics, American Economic Association, vol. 9(2), pages 54-75, May.
    3. Ignacio Esponda & Demian Pouzo, 2014. "Berk-Nash Equilibrium: A Framework for Modeling Agents with Misspecified Models," Papers 1411.1152, arXiv.org, revised Nov 2019.
    4. Edward Cartwright & Amrish Patel, 2010. "Public Goods, Social Norms, and Naïve Beliefs," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 12(2), pages 199-223, April.
    5. Bianchi, Milo & Jehiel, Philippe, 0. "Bundlers' dilemmas in financial markets with sampling investors," Theoretical Economics, Econometric Society.
    6. Andrei Shleifer, 2012. "Psychologists at the Gate: A Review of Daniel Kahneman's Thinking, Fast and Slow," Journal of Economic Literature, American Economic Association, vol. 50(4), pages 1080-1091, December.
    7. Milo Bianchi & Philippe Jehiel, 2019. "Bundling, Belief Dispersion, and Mispricing in Financial Markets," Working Papers halshs-02183306, HAL.
    8. David Ettinger & Philippe Jehiel, 2004. "Towards a Theory of Deception," Levine's Bibliography 122247000000000247, UCLA Department of Economics.
    9. Ignacio Esponda & Demian Pouzo, 2015. "Equilibrium in Misspecified Markov Decision Processes," Papers 1502.06901, arXiv.org, revised May 2016.
    10. Shleifer, Andrei, 2012. "Psychologists at the Gate: Review of Daniel Kahneman’s Thinking, Fast and Slow," Scholarly Articles 10735580, Harvard University Department of Economics.
    11. Bianchi, Milo & Jehiel, Philippe, 2015. "Financial reporting and market efficiency with extrapolative investors," Journal of Economic Theory, Elsevier, vol. 157(C), pages 842-878.
    12. Bohren, Aislinn & Hauser, Daniel, 2017. "Bounded Rationality And Learning: A Framework and A Robustness Result," CEPR Discussion Papers 12036, C.E.P.R. Discussion Papers.
    13. Ran Spiegler, 2017. "“Data Monkeys”: A Procedural Model of Extrapolation from Partial Statistics," Review of Economic Studies, Oxford University Press, vol. 84(4), pages 1818-1841.
    14. Xavier Gabaix, 2017. "Behavioral Inattention," NBER Working Papers 24096, National Bureau of Economic Research, Inc.
    15. Bohren, J. Aislinn, 2016. "Informational herding with model misspecification," Journal of Economic Theory, Elsevier, vol. 163(C), pages 222-247.
    16. Ignacio Esponda & Demian Pouzo & Yuichi Yamamoto, 2019. "Asymptotic Behavior of Bayesian Learners with Misspecified Models," Papers 1904.08551, arXiv.org, revised Oct 2019.
    17. Ran Spiegler, 2006. "The Market for Quacks," Review of Economic Studies, Oxford University Press, vol. 73(4), pages 1113-1131.
    18. Philippe Jehiel & Jakub Steiner, 2020. "Selective Sampling with Information-Storage Constraints [On interim rationality, belief formation and learning in decision problems with bounded memory]," Economic Journal, Royal Economic Society, vol. 130(630), pages 1753-1781.
    19. Roland G. Fryer & Matthew O. Jackson, 2002. "Categorical Cognition: A Psychological Model of Categories and Identification in Decision Making," Microeconomics 0211002, University Library of Munich, Germany.
    20. Sandholm, William H. & Izquierdo, Segismundo S. & Izquierdo, Luis R., 2019. "Best experienced payoff dynamics and cooperation in the Centipede game," Theoretical Economics, Econometric Society, vol. 14(4).

    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:15084. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.