?Just Forget It?: Memory Distortion as Bounded Rationality

Frey, Bruno

?Just Forget It?: Memory Distortion as Bounded Rationality

CREMA Working Paper Series from Center for Research in Economics, Management and the Arts (CREMA)

Abstract: Distortions in memory impose important bounds on rationality but have been largely disregarded in economics. While it is possible to learn, it is more difficult, and sometimes impossible, to unlearn. This retention effect lowers individual utility directly or via reduced productivity, and adds costs to principal-agent relationships. The imprinting effect states that the more one tries to forget a piece of information the more vivid it stays in memory, leading to a paradoxical outcome. The effects are based on, and are supported by, psychological experiments, and it is shown that they are relevant in many economic situations and beyond.

Keywords: Memory; bounded rationality; learning; retention; ironic process theory; principalagency theory (search for similar items in EconPapers)
JEL-codes: D11 D83 J2 M20 Z00 (search for similar items in EconPapers)
Date: 2004-06
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: ‘‘Just forget it.’’ Memory distortions as bounded rationality (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:cra:wpaper:2005-01

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