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An Economic Definition of 'Fear of Missing Out' (FOMO)

Author

Listed:
  • Mohammed Kaddouhah

    (School of Management, Swansea University)

Abstract

This research note proposes an economic definition of the popular phenomenon of Fear of Missing Out (FOMO). Our definition assumes that FOMO causes individuals to base their decision-making utility on their own anticipated regret and the decisions made by individuals in their social peer group. We use an example to illustrate how to analyse decision-making under FOMO preferences and to highlight differences with the concept of regret aversion.

Suggested Citation

  • Mohammed Kaddouhah, 2023. "An Economic Definition of 'Fear of Missing Out' (FOMO)," Working Papers 2023-01, Swansea University, School of Management.
    • Handle: RePEc:swn:wpaper:2023-01
    as

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    File URL: https://rahwebdav.swan.ac.uk/repec/pdf/WP2023-01.pdf
    File Function: First version, 2023
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    References listed on IDEAS

    as
    1. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    2. Quiggin, John, 1994. "Regret Theory with General Choice Sets," Journal of Risk and Uncertainty, Springer, vol. 8(2), pages 153-165, March.
    3. Zeelenberg, M., 1999. "Anticipated regret, expected feedback and behavioral decision-making," Other publications TiSEM 38371d1b-31fd-45b0-860f-b, Tilburg University, School of Economics and Management.
    4. Fabio Maccheroni & Massimo Marinacci & Aldo Rustichini, 2012. "Social Decision Theory: Choosing within and between Groups," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(4), pages 1591-1636.
    5. David E. Bell, 1982. "Regret in Decision Making under Uncertainty," Operations Research, INFORMS, vol. 30(5), pages 961-981, October.
    6. Qin, Jie, 2015. "A model of regret, investor behavior, and market turbulence," Journal of Economic Theory, Elsevier, vol. 160(C), pages 150-174.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    anticipated regret; Fear of Missing Out; FOMO; financial decision making;
    All these keywords.

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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