Conference Paper

Context, conflict, weights, and identities: some psychological aspects of decision making

Abstract: Experimental psychology provides a drastically different picture of human abilities, motives, and behavior from that which predominates economic analyses. Individual preferences are normatively assumed to be well-ordered and consistent, but descriptively shown to be inconsistent and malleable. Not having at their disposal clear and reliable procedures for assigning values to options, people need to construct their preferences in the context of decision, which is rife with, among other things, conflict, emotion, contextual influences, and shifts in perspective and attention. Like many other traits and behaviors, preference inconsistency is the outcome not of distracted shortcuts or avoidable errors, but of fundamental aspects of mental life that are central to how people process information. Thus, it may help to think of individual decision makers not as faulty economic agents, but as fundamentally different creatures.

Keywords: Economic policy; Macroeconomics; Economics;

Status: Published in How humans behave: implications for economics and economic policy

Bibliographic Information

Provider: Federal Reserve Bank of Boston

Part of Series: Conference Series ; [Proceedings]

Publication Date: 2003

Volume: 48

Issue: Jun