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Choice set dependent performance and post-decision dissonance

Toru Suzuki ()

Journal of Economic Behavior & Organization, 2019, vol. 163, issue C, 24-42

Abstract: A decision maker (DM) selects a project from a set of alternatives with uncertain productivity. After the choice, she observes a signal about productivity and decides how much effort to put in. This paper analyzes the optimal decision problem of the DM who rationally filters information to deal with her post-decision cognitive dissonance. It is shown that the optimal effort level for a project can be affected by unchosen projects in her choice set, and the nature of the choice set-dependence is determined by the signal structure. Some comparative statics of choice set-dependence is also provided. Finally, based on the results, the optimal choice set design is also explored. This paper offers a simple framework to explain the experimental finding in psychology that people’s effort level for a project can be enhanced when the project is chosen by themselves rather than by others.

Keywords: Choice set-dependence; Post-decision dissonance; Optimal choice set design (search for similar items in EconPapers)
JEL-codes: D83 D91 (search for similar items in EconPapers)
Date: 2019
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