Open AccessAre More Alternatives Better for Decision-Makers? A Note on the Role of Decision Cost
Author(s) -
HueiChung Lu,
Ming Sheng Chen,
Juinjen Chang
Publication year - 2005
Publication title -
theory and decision
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.602
H-Index - 37
eISSN - 1573-7187
pISSN - 0040-5833
DOI - 10.1007/s11238-005-5063-1
Subject(s) - underpinning , set (abstract data type) , management science , process (computing) , decision process , decision analysis , economics , decision theory , decision problem , computer science , mathematical economics , operations research , microeconomics , mathematics , engineering , civil engineering , programming language , operating system
While the traditional economic wisdom believes that an individual will become better off by being given a larger opportunity set to choose from, in this paper we question this belief and build a formal theoretical model that introduces decision costs into the rational decision process. We show, under some reasonable conditions, that a larger feasible set may actually lower an individual’s level of satisfaction. This provides a solid economic underpinning for the Simon prediction. Copyright Springer 2005bounded rationality, considered subset, decision cost, D11, D83,
Accelerating Research
Robert Robinson Avenue,
Oxford Science Park, Oxford
OX4 4GP, United Kingdom
Address
John Eccles HouseRobert Robinson Avenue,
Oxford Science Park, Oxford
OX4 4GP, United Kingdom