Essays on Decision-Making

Abstract

I investigate how high-stakes decision-makers simplify complex choices, respond to choice fatigue, and learn from their mistakes. In Chapter 1, I find that, when constrained, emergency room doctors engage in "satisficing" by shifting their attention away from the financial implications of their treatment choices and focusing solely on clinical considerations. In doing so, quality of care improves and the gap in care between insured and uninsured patients narrows significantly. In Chapter 2, I find that when parole judges are fatigued by repeated choice, they resort to simple rules of thumb that increase the rate of parole to the least-risky incarcerated individuals but decrease the rate of parole for individuals serving life sentences. Accounting for the costs of future recidivism and incarceration, I find that the decisions made when judges are fatigued are optimal and cost-effective. Finally, in Chapter 3, I show that emergency room physicians overreact to recent adverse events. Female physicians, however, react to, extrapolate from, and remember adverse patient events for longer. Gender differences in how physicians learn from mistakes shed light on one channel through which gender gaps in performance emerge and persist.