Dual decision processes: retrieving preferences when some choices are automatic

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: Evidence from the cognitive sciences suggests that some choices are conscious and reflect individual volition while others tend to be automatic, being driven by analogies with past experiences. Under these circumstances, standard economic modeling might not always be applicable because not all choices are the result of individual tastes. We propose a behavioral model that can be used in standard economic analysis that formalizes the way in which conscious and automatic choices arise by presenting a decision maker comprised of two selves. One self compares past decision problems with the one the decision maker faces and, when the problems are similar enough, it replicates past behavior (Automatic choices). Otherwise, a second self is activated and preferences are maximized (Conscious choices). We then present a novel method capable of identifying a set of conscious choices from observed behavior and discuss its usefulness as a framework for studying asymmetric pricing and empirical puzzles in different settings.

Keywords: Dual processes; similarity; revealed preferences; fluency; automatic choice (search for similar items in EconPapers)
JEL-codes: D01 D03 D60 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-mic, nep-neu and nep-upt
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Dual Decision Processes: Retrieving Preferences When Some Choices Are Automatic (2021)
Working Paper: Dual Decision Processes: Retrieving Preferences when some Choices are Automatic (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1673

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