EconPapers    
Economics at your fingertips  
 

Complexity and biases

Kenan Kalayci () and Marta Serra-Garcia

Experimental Economics, 2016, vol. 19, issue 1, No 2, 50 pages

Abstract: Abstract We examine experimentally how complexity affects decision-making, when individuals choose among different products with varying benefits and costs. We find that complexity in costs leads to choosing a high-benefit product, with high costs and overall lower payoffs. In contrast, when complexity is in the benefits of the product, we cannot reject the hypothesis of random mistakes. We also examine the role of heterogeneous complexity. We find that individuals still (mistakenly) choose the high-benefit but costly product, even if cheaper and simple products are available. Our results suggest that salience is a main driver of choices under different forms of complexity.

Keywords: Complexity; Mistakes; Credit Choice; Experiment; Salience (search for similar items in EconPapers)
JEL-codes: C91 D03 D14 G02 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://link.springer.com/10.1007/s10683-015-9434-3 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
Journal Article: Complexity and biases (2016) Downloads
Working Paper: Complexity and Biases (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:expeco:v:19:y:2016:i:1:d:10.1007_s10683-015-9434-3

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/10683/PS2

DOI: 10.1007/s10683-015-9434-3

Access Statistics for this article

Experimental Economics is currently edited by David J. Cooper, Lata Gangadharan and Charles N. Noussair

More articles in Experimental Economics from Springer, Economic Science Association Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2021-12-29
Handle: RePEc:kap:expeco:v:19:y:2016:i:1:d:10.1007_s10683-015-9434-3