The price of flexibility: Towards a theory of Thinking Aversion

Pietro Ortoleva

Journal of Economic Theory, 2013, vol. 148, issue 3, 903-934

Abstract: We study the behavior of an agent who dislikes large choice sets because of the ‘cost of thinking’ involved in choosing from them. Focusing on preferences over lotteries of menus, we introduce the notion of Thinking Aversion. We characterize preferences as the difference between an affine evaluation of the content of the menu and a function that assigns to each menu a thinking cost. We provide conditions for which this cost can be seen as the cost that the agent has to sustain to figure out her preferences in order to make a choice.

Keywords: Cost of thinking; Contemplation cost; Bounded rationality; Preference over menus; Preference for flexibility; Choice overload (search for similar items in EconPapers)
JEL-codes: D81 D83 D84 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (42)

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Working Paper: The Price of Flexibility: Towards a Theory of Thinking Aversion (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:3:p:903-934

DOI: 10.1016/j.jet.2012.10.009

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