Choice or information overload ?

Fabrice Le Lec, Marianne Lumeau and Benoît Tarroux
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Marianne Lumeau: CEPN, Université de Paris 13, LABEX ICCA, France

Economics Working Paper Archive (University of Rennes & University of Caen) from Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS

Abstract: This paper aims to test how the profusion of choice and information affects individuals' decisions. In particular, we investigate whether the possible choice overload effects are due to the mere presence of many alternatives or the difficulty in processing abundance of information that comes with the proliferation of options. To do so, we use the frequency with which familiar alternatives are preferred to unfamiliar ones as a behavioural measure of overload. We first propose an individual decision model, in which uncertainty about values of alternatives leads consumer to prefer familiar goods. We use this theoretical approach to devise an experiment where the level of information and the number of alternatives systematically vary. Our results show that individuals are prone to overload in the presence of larger choice sets, but that information has a small impact, if any.

Keywords: Choice overload; Information overload; Bounded rationality; Familiarity; Experimental Economics (search for similar items in EconPapers)
JEL-codes: C91 D03 D83 (search for similar items in EconPapers)
Date: 2016-04
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-upt
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Citations: View citations in EconPapers (1)

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