‘How Malleable Are Choice Brackets? The Case of Myopic Loss Aversion’

Abstract

We study whether a change in the framing of the decision problem affects how individuals bracket their choices in the context of myopic loss aversion. We find a systematic asymmetry in the malleability of choice brackets: Subjects who were previously exposed to a frame that encourages narrow bracketing can learn to bracket broadly when the framing of the decision problem changes. In contrast, subjects previously exposed to a frame encouraging broad bracketing continue to bracket broadly after a change in framing. This learning also carries over to related decision tasks.

This seminar is part of the Department of Economics Seminar Series 2016-17. The seminars are open to all - no registration necessary.