Does choice change preferences? An incentivized test of the mere choice effect.

ABSTRACT: Widespread evidence from psychology and neuroscience documents that previous choices unconditionally increase the later desirability of chosen objects, even if those choices were uninformative. This is problematic for economists who use choice data to estimate latent preferences, demand functions, and social welfare. The evidence on this mere choice effect, however, exhibits serious shortcomings which prevent evaluating its possible relevance for economics. In this paper, we present a novel, parsimonious experimental design to test for the economic validity of the mere choice effect addressing these shortcomings. Our design uses well-defined, monetary lotteries, all decisions are incentivized, and we effectively randomize participants' initial choices without relying on deception. R

SUBMITTER: Alos-Ferrer C 

PROVIDER: S-EPMC10319671 | biostudies-literature | 2023

REPOSITORIES: biostudies-literature