Luxembourg Institute of Socio-Economic Research (LISER)
Maison des Sciences Humaines
11, Porte des Sciences
L-4366 Esch-sur-Alzette / Belval
LISER Conference Room 1st Floor
3E-seminars@liser.lu
Abstract
Many important economic outcomes result from the cumulative effects of smaller choices and events, so the best outcomes require, minimally, accounting for total outcomes so far. We formally show that narrow bracketing — the neglect of such accounting — is unidentified if and only if the willingness to pay for an option is constant across all single choice sets, unifying, extending, and generalizing prior results. We empirically document narrow bracketing
in work choices in a pre-registered experiment on Amazon Mechanical Turk: bracketing due to separate or combined choice presentations changes average reservation wages by 13-28%. In our experiment, broad bracketing is so simple to implement that narrow bracketing is hard to reconcile with optimal conservation of cognitive resources. An attempt at debiasing by drawing attention to the interdependencies has limited success.
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Supported by the Luxembourg National Research Fund (PRIDE19/14233191).
More about the 3E DTU
The Doctoral Training Unit (DTU) 3E - Experiments, Ethics and Economics - consists of an interdisciplinary consortium of 9 social scientists who use scientific experiments involving human subjects in their research. The objective of the consortium is to create a formal link for collaboration across the three existing social science research laboratories in Luxembourg, with the aim to push forward the state-of-the-art of what we know about human behavior in economic interactions. The DTU 3E gathers members across 5 Luxembourgish research units:
(1) Luxembourg Institute of Socio-Economic Research LISER
(2) Institute for Health and Behavior IHB (Faculty of Humanities FLSHASE, University of Luxembourg UL)
(3) Institute of Cognitive Science and Assessment COSA (FLSHASE, UL)
(4) Luxembourg School of Finance LSF (Faculty of Law, Economics and Finance FDEF, UL)
(5) Luxembourg Centre of Logistics LCL (Economics Research Centre CREA, FDEF, UL)
