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| Type | Journal Article |
| Scope | Discipline-based scholarship |
| Title | The gradual nature of economic errors |
| Organization Unit | |
| Authors |
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| Item Subtype | Original Work |
| Refereed | Yes |
| Status | Published in final form |
| Language |
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| Journal Title | Journal of Economic Behavior & Organization |
| Publisher | Elsevier |
| Geographical Reach | international |
| ISSN | 0167-2681 |
| Volume | 200 |
| Page Range | 55 - 66 |
| Date | 2022 |
| Abstract Text | Overwhelming evidence from the cognitive sciences shows that, in simple discrimination tasks (determining what is louder, longer, brighter, or even which number is larger) humans make more mistakes and decide more slowly when the stimuli are closer along the relevant scale. We investigate to what extent these effects are relevant for economic decisions in a setting where optimal choices are objectively known (and independent of attitudes toward risk). We find that, even for tasks with objectively-correct answers, error rates and response times increase gradually as expected values become closer. Differences in payoff-independent numerical magnitudes also play a role, which however only becomes clear when one accounts for expected values. We conclude that the gradual effects on choice found in cognitive discrimination paradigms are very much present in economic choices, and depend on economic as well as perceptual variables. |
| Digital Object Identifier | 10.1016/j.jebo.2022.05.015 |
| Other Identification Number | merlin-id:23273 |
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| Keywords | Organizational behavior and human resource management, economics and econometrics, stochastic choice, strength of preference, decision errors |