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Decision Research at Warwick (DR@W Forum)

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DR@W Forum: Pedro Bordalo (Said Business School, Oxford)

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Location: WBS 0.013

We present a theory of decisions in which attention to the features of choice options is determined by the decision maker's categorization of the current choice problem in a set of problems she solved in the past. Categorization depends on goal-relevant as well as contextual problem-level features. The model yields systematic heterogeneity in attention and choice in a given problem based on different past experiences, rigidity of choices when categorization does not change despite new data, and discontinuous shifts when changes in bottom-up salient features cause re-categorization. The model unifies major puzzles and framing effects in riskless, statistical, and lottery choice based on heterogenous and unstable mental representations.

Tags: Draw Forum

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