Age Effects and Heuristics in Decision Making

Sudipta Sarangi, Tibor Besedes, Cary Deck () and Mikhael Shor

Departmental Working Papers from Department of Economics, Louisiana State University

Abstract: We examine in controlled experiments how individuals make choices when faced with multiple options. The choice tasks mimic the selection of health insurance, prescription drug, or retirement savings plans. However, in our experiment, the available options can be objectively ranked. We find that the probability of a person selecting the optimal option declines as the number of options increases, with the decline more pronounced for older subjects. Heuristics seem to differ by age with older subjects relying more on suboptimal decision rules. Behavior consistent with the estimated decision rules is observed in an out-of-sample experiment.

Date: 2009-03
New Economics Papers: this item is included in nep-age, nep-cbe, nep-exp and nep-upt
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Age Effects and Heuristics in Decision Making (2012)
Working Paper: Age Effects and Heuristics in Decision Making (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:lsu:lsuwpp:2009-03

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