Imperfect memory and choice under risk

Games and Economic Behavior

Volumn 85, Issue 1, 2014, Pages 127-158

  Gottlieb, Daniel ^a  

^a UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

Behavioral economics; Memory; Self deception

Indexed keywords

EID: 84897723471     PISSN: 08998256     EISSN: 10902473     Source Type: Journal    
DOI: 10.1016/j.geb.2013.11.013     Document Type: Article

References (102)

1. Akerlof G.A., Dickens W.T. The economic consequences of cognitive dissonance. Amer. Econ. Rev. 1982, 72(3):307-319.
2. Allport G.W. The ego in contemporary psychology. Psychol. Rev. 1943, 50:451-478.
3. Anderson J.R. Learning and Memory: An Integrated Approach 1995, John Wiley & Sons, New York.
4. Baron R.A. Counterfactual thinking and venture formation: The potential effects of thinking about what might have been. J. Bus. Venturing 1999, 15:79-91.
5. Bell D.E. Regret in decision making under uncertainty. Operations Res. 1982, 30:961-981.
6. Benabou R. Groupthink: Collective delusions in organizations and markets. Rev. Econ. Stud. 2013, 80:429-462.
7. Benabou R., Tirole J. Self-confidence and personal motivation. Quart. J. Econ. 2002, 117(3):871-915.
8. Benabou R., Tirole J. Willpower and personal rules. J. Polit. Economy 2004, 112(4):848-886.
9. Benabou R., Tirole J. Belief in a Just World and redistributive politics. Quart. J. Econ. 2006, 121(2):699-746.
10. Benabou R., Tirole J. Incentives and prosocial behavior. Amer. Econ. Rev. 2006, 96(5):1652-1678.
11. Benabou, R., Tirole, J., 2006c. Identity, dignity and taboos: beliefs as assets. Princeton University and Université de Toulouse. Mimeo.
12. Berglas S., Baumeister R. Your Own Worst Enemy: Understanding the Paradox of Self-Defeating Behavior 1993, BasicBooks, New York.
13. Bernheim B.D., Thomadsen R. Memory and anticipation. Econ. J. 2005, 115:271-304.
14. Bodner R., Prelec D. Self-signaling in a neo-Calvinist model of everyday decision making. Psychol. Econ. 2002, vol. II. Oxford University Press.
15. Brocas I., Carrillo J.D. The brain as a hierarchical organization. Amer. Econ. Rev. 2008, 98(4):1312-1346.
16. Brockner J. The escalation of commitment to a failing course of action: toward theoretical progress. Acad. Manage. Rev. 1992, 17:39-61.
17. Brockner J., Houser R., Birnbaum G., Lloyd K., Deitcher J., Nathanson S., Rubin J.Z. Escalation of commitment to an ineffective course of action: The effect of feedback having negative implications for self-identity. Adm. Sci. Q. 1986, 31:109-126.
18. Brunnermeier M.K., Parker J.A. Optimal expectations. Amer. Econ. Rev. 2005, 95:1092-1118.
19. Budescu D.V., Weinberg S., Wallsten T.S. Decisions based on numerically and verbally expressed uncertainties. J. Exp. Psychol. Hum. Percept. Perform. 1988, 14:281-294.
20. Budescu D.V., Kuhn K.M., Kramer K.M., Johnson T.R. Modeling certainty equivalents for imprecise gambles. Org. Behav. Hum. Decis. Process. 2002, 88:748-768.
21. Byrne C.C., Kurland J.A. Self-deception in an evolutionary game. J. Theor. Biol. 2001, 212(4):457-480.
22. Caplin A., Eliaz K. AIDS policy and psychology: A mechanism-design approach. RAND J. Econ. 2003, 34(4):631-646.
23. Caplin A., Leahy J. Psychological expected utility theory and anticipatory feelings. Quart. J. Econ. 2001, 116(1):55-79.
24. Caplin A., Leahy J. The supply of information by a concerned expert. Econ. J. 2004, 114:487-505.
25. Compte O., Postlewaite Andrew Confidence-enhanced performance. Amer. Econ. Rev. 2004, 94:1536-1557.
26. Chau A.W., Phillips J.G. Effects of perceived control upon wagering and attributions in computer blackjack. J. Gen. Psychol. 1995, 122:253-269.
27. Chow C.C., Sarin R.K. Comparative ignorance and the Ellsberg paradox. J. Risk Uncertainty 2001, 22:129-139.
28. Dawson E., Savitsky K., Dunning D. Don't tell me, I don't want to know: Understanding people's reluctance to obtain medical diagnostic information. J. Appl. Soc. Psychol. 2006, 36:751-768.
29. Dewatripont M., Jewitt I., Tirole J. The economics of career concerns, Part I: Comparing information structures. Rev. Econ. Stud. 1999, 66:183-198.
30. Di Mauro C. Uncertainty aversion vs. competence: An experimental market study. Theory Dec. 2008, 64:301-331.
31. Doob J.L. Application of the theory of martingales. Colloques Internationaux du Centre National de la Recherche Scientifique 1949, vol. 13:23-27. CNRS, Paris.
32. Dow J. Search decisions with limited memory. Rev. Econ. Stud. 1991, 58:1-14.
33. Dunning D. Trait importance and modifiability as factors influencing self-assessment and self-enhancement motives. Pers. Soc. Psychol. Bull. 1995, 21:1297-1306.
34. Edwards W. Conservatism in human information processing. Formal Representation of Human Judgment 1968, John Wiley and Sons, New York. B. Kleinmutz (Ed.).
35. Edwards W. Conservatism in human information processing. Judgment Under Uncertainty: Heuristics and Biases 1982, Cambridge University Press. D. Kahneman, P. Slovic, A. Tversky (Eds.).
36. Eliaz K., Spiegler R. Can anticipatory feelings explain anomalous choices of information sources?. Games Econ. Behav. 2006, 56:87-104.
37. Festinger L. A Theory of Cognitive Dissonance 1957, Stanford University Press, Stanford, CA.
38. Fox C.R., Tversky A. Ambiguity aversion and comparative ignorance. Quart. J. Econ. 1995, 110:585-603.
39. Fox C.R., Weber M. Ambiguity aversion, comparative ignorance, and decision context. Org. Behav. Hum. Decis. Process. 2002, 88:476-498.
40. Freedman D.A. On the asymptotic behavior of Bayes' estimates in the discrete case. Ann. Math. Stat. 1963, 34(4):1386-1403.
41. Fudenberg D., Levine D.K. Maintaining a reputation when strategies are imperfectly observed. Rev. Econ. Stud. 1992, 59(3):561-579.
42. Fudenberg D., Levine D.K. A dual self model of impulse control. Amer. Econ. Rev. 2006, 96:1449-1476.
43. Fudenberg D., Tirole J. Game Theory 1991, MIT Press, Cambridge, MA.
44. Genesove D., Mayer C. Loss aversion and seller behavior: Evidence from the housing market. Quart. J. Econ. 2001, 116:1233-1260.
45. Gollwitzer P.M., Earle W.B., Stephan W.G. Affect as a determinant of egotism: Residual excitation and performance attributions. J. Pers. Soc. Psychol. 1982, 43:702-709.
46. Goodie A.S. The effects of control on betting: Paradoxical betting on items of high confidence with low value. J. Exper. Psychol., Learn., Mem., Cogn. 2003, 29:598-610.
47. Goodie A.S., Young D.L. The skill element in decision making under uncertainty: Control or competence?. Judgm. Decis. Mak. 2007, 2:189-203.
48. Greenwald A.G. The totalitarian ego: Fabrication and revision of personal history. Amer. Psychol. 1980, 35:603-618.
49. Heath C., Tversky A. Preference and belief: Ambiguity and competence in choice under uncertainty. J. Risk Uncertainty 1991, 4(1):5-28.
50. Hellman M.E., Cover T.M. A review of recent results on learning with finite memory. Probl. Control Inf. Theory 1973, 221-227.
51. Hilgard E.R. Human motives and the concept of self. Amer. Psychol. 1949, 4:374-382.
52. Hirshleifer D., Welch I. An economic approach to the psychology of change: Amnesia, inertia, and impulsiveness. J. Econ. Manag. Strategy 2002, 11:379-421.
53. Holmstrom B. Managerial incentive problems: A dynamic perspective. Rev. Econ. Stud. 1999, 66:169-182.
54. Horswill M.S., McKenna F.P. The effect of perceived control on risk taking. J. Appl. Soc. Psychol. 1999, 29:378-392.
55. Hvide H. Pragmatic beliefs and overconfidence. J. Econ. Behav. Organ. 2002, 2002(48):15-28.
56. Johnston W.A. Individual performance and self-evaluation in a simulated team. Organ. Behav. Hum. Perform. 1967, 2:309-328.
57. Josephs R.A., Larrick R.P., Steele C.M., Nisbett R.E. Protecting the self from the negative consequences of risky decisions. J. Pers. Soc. Psychol. 1992, 62:26-37.
58. Kahneman D., Knetsch J.L., Thaler R.H. Experimental tests of the endowment effect and the coase theorem. J. Polit. Economy 1990, 98(6):1325-1348.
59. Keppe H., Weber M. Judged knowledge and ambiguity aversion. Theory Dec. 1995, 39:51-77.
60. Kihlstrom J.F., Beer J.S., Klein S.B. Self and identity as memory. Handbook of Self and Identity 2003, Guilford Press, New York, NY. M.R. Leary, J.P. Tangney (Eds.).
61. Kilka M., Weber M. Home bias in international stock return expectation. J. Psychol. Financ. Mark. 2000, 1:176-192.
62. Kopczuk W., Slemrod J. Denial of death and economic behavior. Adv. Theor. Econ. 2005, 5(1):5.
63. Korner I. Experimental Investigation of Some Aspects of the Problem of Repression: Repressive Forgetting. Contributions to Education 1950, vol. 970. Bureau of Publications, Teachers' College, Columbia University, New York, NY.
64. Koszegi B. Health anxiety and patient behavior. J. Health Econ. 2003, 22:1073-1084.
65. Koszegi B. Ego utility, overconfidence, and task choice. J. Eur. Econ. Assoc. 2006, 4:673-707.
66. Kuehberger A., Perner J. The role of competition and knowledge in the Ellsberg task. J. Behav. Decis. Mak. 2003, 16:181-191.
67. Kunda Z., Sanitioso R. Motivated changes in the self-concept. J. Pers. Soc. Psychol. 1989, 61:884-897.
68. Larrick R.P. Motivational factors in decision theories: The role of self-protection. Psychol. Bull. 1993, 113:440-450.
69. Li W. Changing one's mind when the facts change: Incentives of experts and the design of reporting protocols. Rev. Econ. Stud. 2007, 74:1175-1194.
70. List J. Does market experience eliminate market anomalies?. Quart. J. Econ. 2003, 118(1):41-71.
71. List J., Haigh M.S. A simple test of expected utility theory using professional traders. Proc. Natl. Acad. Sci. 2005, 102:945-948.
72. Loomes G., Sugden R. Regret theory: An alternative theory of rational choice under uncertainty. Econ. J. 1982, 92:805-824.
73. Lowenstein G.A. Anticipation and the valuation of delayed consumption. Econ. J. 1987, 97:666-684.
74. Mather M., Shafir E., Johnson M.K. Memory and remembering chosen and assigned options. Mem. Cogn. 2003, 31(3):422-433.
75. Mijovic-Prelec D., Prelec D. Self-deception as self-signaling: A model and experimental evidence. Philos. Trans. R. Soc. Biol. Sci. 2010, 365:227-240.
76. Mill J. Analysis of the Phenomena of the Human Mind 1829, Baldwin and Craddock, London.
77. Mullainathan S. A memory-based model of bounded rationality. Quart. J. Econ. 2002, 117(3):735-774.
78. Philipson T., Posner R. A theoretical and empirical investigation of the effects of public health subsidies for STD testing. Quart. J. Econ. 1995, 110(2):445-474.
79. Piccione M., Rubinstein A. On the interpretation of decision problems with imperfect recall. Games Econ. Behav. 1997, 20:3-24.
80. Prelec D. Self-delusion: A neuroeconomics model and fMRI evidence 2008, Seminar on the Foundations of Human Social Behavior, University of Zurich.
81. Quattrone G.A., Tversky A. Causal versus diagnostic contingencies: On self-deception and the Voter's illusion. J. Pers. Soc. Psychol. 1984, 46:237-248.
82. Rabin M. Cognitive dissonance and social change. J. Econ. Behav. Organ. 1994, 23:177-194.
83. Rabin M. Risk aversion and expected-utility theory: A calibration exercise. Econometrica 2000, 68(5):1281-1292.
84. Rapaport D. Emotions and Memory 1961, Science Editions, New York.
85. Reb J., Connolly T. Possession, feelings of ownership and the endowment effect. Judgm. Decis. Mak. 2007, 2:107-114.
86. Robbins H. A sequential decision problem with a finite memory. Proc. Natl. Acad. Sci. 1956, 42:920-923.
87. Samuelson P.A. Risk and uncertainty: A fallacy of large numbers. Scientia 1963, 57(6):1-6.
88. Schelling T. The mind as a consuming organ. The Multiple Self 1985, Cambridge University Press, New York. J. Elster (Ed.).
89. Segal U., Spivak A. First order versus second order risk aversion. J. Econ. Theory 1990, 51:111-125.
90. Sedikides C., Green J.D., Pinter B.T. Self-protective memory. The Self and Memory 2004, Psychology Press, Philadelphia. D. Beike, J. Lampinen, D. Behrend (Eds.).
91. Staw B.M. Knee deep in the Big Muddy. Org. Behav. Hum. Decis. Process. 1976, 35:124-140.
92. Staw B.M. The escalation of commitment to a course of action. Acad. Manage. Rev. 1981, 6:577-587.
93. Steele C.M. The psychology of self-affirmation: Sustaining the integrity of the self. Adv. Exp. Soc. Psychol. 1988, vol. 21:261-302. Academic Press, New York.
94. Strahilevitz A.M., Loewenstein G. The effect of ownership history on the valuation of objects. J. Cons. Res. 1998, 25:276-289.
95. Taylor K. Testing credit and blame attributions as explanation for choices under ambiguity. Org. Behav. Hum. Decis. Process. 1995, 64:128-137.
96. Taylor S.E., Gollwitzer P.M. The effects of mindset on positive illusions. J. Pers. Soc. Psychol. 1995, 69:213-226.
97. Thaler R.H. Toward a positive theory of consumer choice. J. Econ. Behav. Organ. 1980, 1:39-60.
98. Thaler R.H., Shefrin H.M. An economic theory of self-control. J. Polit. Economy 1981, 89:392-406.
99. Trivers R. The elements of a scientific theory of self-deception. Ann. N.Y. Acad. Sci. 2000, 907:114-131.
100. Wilson, A., 2003. Bounded memory and biases in information processing. Princeton University. Mimeo.
101. Wolf J.R., Arkes H.R., Muhanna W.A. The power of touch: An examination of the effect of duration of physical contact on the valuation of objects. Judgm. Decis. Mak. 2008, 3(6):476-482.
102. Zuckerman M. Attibution of success and failure revisited, or: The motivational bias is alive and well in attribution theory. J. Pers. 1979, 47:245-287.