Sarah Auster - A Theory of Choice Overload

Seminars
Speakers
Sarah Auster, University of Bonn
12:45 - 14:00
Alberto Alesina Seminar Room 5.e4.sr04 - floor 5 - via Roentgen 1
People in a classroom

joint with Yeon-Koo Che

Abstract:

This paper revisits the classic Pandora’s box problem, studying a decision-maker (DM) who seeks to minimize her maximal ex-post regret. The DM decides how many options to explore before choosing one or taking an outside option. We characterize the regret-minimizing search rule and show that the likelihood of opting out often increases as more options become available for exploration. Our model thus predicts `choice overload,’ the phenomenon by which a default alternative is more likely to be chosen in larger choice sets.

 

For further information please contact: erika.somma@unibocconi.it