Coping with complexity - Experimental evidence for narrow bracketing in multi-stage contests

Rudi Stracke, Rudolf Kerschbamer and Uwe Sunde

Munich Reprints in Economics from University of Munich, Department of Economics

Abstract: This paper investigates whether decision makers bracket their choices narrowly to facilitate complex decision problems. Evidence from a framing variation of rewards in experimental two-stage pairwise elimination contests indicates that decision makers neglect the option value of participation in future stages of the contest if the reward frame facilitates the separate consideration of stages, but not if the reward frame induces forward-looking behavior. Decision makers, account for the option value of participation in future stages of the contest independently of the reward frame, however, when complex strategic interactions in future stages of the contest are replaced by simple lotteries that facilitate the determination of the option value. The results present novel evidence for the prevalence and the determinants of choice bracketing as a means to cope with complexity. (C) 2017 Published by Elsevier B.V.

Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Published in European Economic Review 98(2017): pp. 264-281

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Coping with complexity – Experimental evidence for narrow bracketing in multi-stage contests (2017)
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:lmu:muenar:49878

Access Statistics for this paper

More papers in Munich Reprints in Economics from University of Munich, Department of Economics Ludwigstr. 28, 80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Tamilla Benkelberg ().