Correlates of Narrow Bracketing

Alexander Koch and Julia Nafziger

Economics Working Papers from Department of Economics and Business Economics, Aarhus University

Abstract: We examine whether different phenomena of narrow bracketing can be traced back to some common characteristic and whether and how different phenomena are related. We find that making dominated lottery choices or ignoring the endowment when making risky choices are related phenomena and are both associated with low levels of cognitive reflection. In contrast, the phenomena of setting narrow goals or narrow mental budgets seem not to reflect choice errors due to low cognitive reflection, but are tools to overcome self-control problems. Buying small scale insurance is associated with having narrow mental budgets - suggesting that people buy such insurance to insure themselves against the consequences of their own self-control strategy.

Keywords: Narrow bracketing; mental accounting; risky choices; cognitive skills; selfcontrol (search for similar items in EconPapers)
JEL-codes: C91 D03 D81 D91 (search for similar items in EconPapers)
Pages: 28
Date: 2016-04-01
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-neu
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Correlates of Narrow Bracketing (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:aah:aarhec:2016-01

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