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