The Allocation of Time in Decision-Making
Morris, Carrie L.
Schuldt, Jonathan P.
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CitationChabris, Christopher F., David Laibson, Carrie L. Morris, Jonathan P. Schuldt, and Dmitry Taubinsky. 2009. The allocation of time in decision-making. Journal of the European Economic Association 7(2-3): 628-637.
AbstractWe study the allocation of time across decision problems. If a decision-maker (1) has noisy estimates of value, (2) improves those estimates the longer he or she analyzes a choice problem, and (3) allocates time optimally, then the decision-maker should spend less time choosing when the difference in value between two options is relatively large. To test this prediction we ask subjects to make 27 binary incentive-compatible intertemporal choices, and measure response time for each decision. Our time allocation model explains 54% of the variance in average decision time. These results support the view that decisionmaking is a cognitively costly activity that uses time as an input allocated according to cost-benefit principles.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:4481495
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