Imperfect memory and choice under risk
Gottlieb, D.
(2014).
Imperfect memory and choice under risk.
Games and Economic Behavior,
85, 127 - 158.
https://doi.org/10.1016/j.geb.2013.11.013
(2014).
Imperfect memory and choice under risk.
Games and Economic Behavior,
85, 127 - 158.
https://doi.org/10.1016/j.geb.2013.11.013
This paper presents a model of choice based on imperfect memory and self-deception. I assume that people have preferences over their own attributes (e.g., skill, knowledge, or competence) and can manipulate their memories. The model provides a prior-dependent theory of regret aversion and allows for prior-dependent information attitudes. It implies that behavior will converge to the one predicted by expected utility theory after a choice has been faced a sufficiently large number of times.