‘What is important is seldom urgent and what is urgent is seldom important’: a study of the strategic implications of the urgency effect in a competitive setting

Mauro Papi ()
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Mauro Papi: University of Aberdeen

Economic Theory Bulletin, 2022, vol. 10, issue 2, No 11, 313-332

Abstract: Abstract The urgency effect refers to people’s tendency to choose a relatively unimportant task (with unambiguously low payoff) over a relatively important task (with unambiguously high payoff), when the former is spuriously framed as urgent. In this paper I study a simple model in which two payoff-maximising task suppliers compete for a population of heterogeneous decision-makers. Task suppliers offer tasks of various importance, and can exert costly effort to manipulate the perceived urgency of the offered tasks. Decision-makers are of two kinds: they either choose more important over less important tasks by disregarding the urgency frames (fully rational) or behave like fully rational decision-makers, except that they are subject to the urgency effect (boundedly rational). I study the unique symmetric equilibrium of the resulting game and derive the conditions under which the urgency effect has detrimental effects on the decision-makers’ welfare. Furthermore, I examine the implications of several policies aimed at correcting the failure, which include educating boundedly rational decision-makers and auditing task suppliers that use urgency framing.

Keywords: Bounded rationality; Framing effects; Urgency effect; Welfare (search for similar items in EconPapers)
JEL-codes: D01 D60 D91 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s40505-022-00236-0

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