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Home | Events Archive | Reference-Dependent Choice Bracketing
Seminar

Reference-Dependent Choice Bracketing

  • Series
    CREED Seminars
  • Speaker(s)
    Pauline Vorjohann (University of Exeter, United Kingdom)
  • Field
    Behavioral Economics
  • Location
    University of Amsterdam, Roeterseilandcampus, room E0.03
    Amsterdam
  • Date and time

    April 06, 2023
    15:30 - 16:45

I derive a theoretical model of choice bracketing from two behavioral axioms in an expected utility framework. The first behavioral axiom establishes a direct link between narrow bracketing and correlation neglect. The second behavioral axiom identifies the reference point as the place where broad and narrow preferences are connected. In my model, the narrow bracketer is characterized by an inability to process changes from the reference point in different dimensions simultaneously. As a result, her tradeoffs between dimensions are distorted. While she disregards interactions between actual outcomes, she appreciates these interactions mistakenly with respect to the reference point.