Thoughts matter: a theory of motivated preference
Matthew Nagler
Theory and Decision, 2023, vol. 94, issue 2, No 3, 247 pages
Abstract:
Abstract This paper develops a model of individual decision-making under bounded rationality in which discretionary cognitive adjustment creates a durable stock that complements choice of action. While it increases utility, adjustment also entails a cost, because focusing attention optimally is effortful and mental resources are scarce. Associated behavioral phenomena are categorized based on whether the operative motivation in adjusting is forward-looking utility maximization or justification of prior action. The theory is in line with prior conceptions of cognitive dissonance, but also offers a more empirically consistent explanation of the endowment effect, persuasive advertising, and sunk-cost effects than existing accounts.
Keywords: Bounded rationality; Endowment effect; Sunk-cost fallacy; Cognitive dissonance; Framing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:kap:theord:v:94:y:2023:i:2:d:10.1007_s11238-022-09891-y
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DOI: 10.1007/s11238-022-09891-y
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