The Memory Premium

Yuval Salant, Jörg L. Spenkuch and David Almog

No 11787, CESifo Working Paper Series from CESifo

Abstract: We explore the role of memory for choice behavior in unfamiliar environments. Using a unique data set, we document that decision makers exhibit a “memory premium.” They tend to choose in-memory alternatives over out-of-memory ones, even when the latter are objectively better. Consistent with well-established regularities regarding the inner workings of human memory, the memory premium is associative, subject to interference and repetition effects, and decays over time. Even as decision makers gain familiarity with the environment, the memory premium remains economically large. Our results imply that the ease with which past experiences come to mind plays an important role in shaping choice behavior.

Keywords: memory; choice behaviour; decision-making; chess960 (search for similar items in EconPapers)
JEL-codes: D01 D87 D91 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11787

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