Are more alternatives better for decision-makers? A note on the role of decision cost
Journal
Theory and Decision
Journal Volume
58
Journal Issue
3
Pages
283-304
Date Issued
2005
Author(s)
Abstract
While the traditional economic wisdom believes that an individual will become better off by being given a larger opportunity set to choose from, in this paper we question this belief and build a formal theoretical model that introduces decision costs into the rational decision process. We show, under some reasonable conditions, that a larger feasible set may actually lower an individual's level of satisfaction. This provides a solid economic underpinning for the Simon prediction. ? Springer 2005.
Subjects
Bounded rationality
Considered subset
Decision cost
SDGs
Type
journal article