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Regret theory and the tyranny of choice

Irons, Ben and Hepburn, Cameron (2007) Regret theory and the tyranny of choice. Economic Record, 83 (261). pp. 191-203. ISSN 0013-0249

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Abstract

As economists, we tend to accept the principle that more choice cannot make us worse off. However, recent evidence from laboratory and field experiments suggests that more choice can inhibit decision-making and reduce search in many situations, potentially reducing welfare. This paper provides a formal theoretical foundation for these observations by embedding the regret theory of Loomes and Sugden (1982) in three search models. Beyond a threshold number of options, we find that ‘less is more’: agents who experience regret have lower utility as the number of options is increased.

Item Type: Article
Official URL: http://www.wiley.com/bw/journal.asp?ref=0013-0249
Additional Information: © 2007 The Economic Society of Australia
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Grantham Research Institute on Climate Change and the Environment
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 01 Mar 2011 12:59
URL: http://eprints.lse.ac.uk/32944/

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