What Makes a Rule Complex?

Oprea, Ryan

What Makes a Rule Complex?

American Economic Review, 2020, vol. 110, issue 12, 3913-51

Abstract: We study the complexity of rules by paying experimental subjects to implement a series of algorithms and then eliciting their willingness-to-pay to avoid implementing them again in the future. The design allows us to examine hypotheses from the theoretical "automata" literature about the characteristics of rules that generate complexity costs. We find substantial aversion to complexity and a number of regularities in the characteristics of rules that make them complex and costly for subjects. Experience with a rule, the way a rule is represented, and the context in which a rule is implemented (mentally versus physically) also influence complexity.

JEL-codes: C73 D11 D12 D83 D91 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (25)

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DOI: 10.1257/aer.20191717

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