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- Title
Memory, Attention, and Choice.
- Authors
Bordalo, Pedro; Gennaioli, Nicola; Shleifer, Andrei
- Abstract
Building on a textbook description of associative memory (Kahana 2012), we present a model of choice in which a choice option cues recall of similar past experiences. Memory shapes valuation and decisions in two ways. First, recalled experiences form a norm, which serves as an initial anchor for valuation. Second, salient quality and price surprises relative to the norm lead to large adjustments in valuation. The model unifies many well-documented choice puzzles, including the attribution and projection biases, inattention to hidden attributes, background contrast effects, and context-dependent willingness to pay. Unifying these puzzles on the basis of selective memory and attention to surprise yields multiple new predictions.
- Publication
Quarterly Journal of Economics, 2020, Vol 135, Issue 3, p1399
- ISSN
0033-5533
- Publication type
Article
- DOI
10.1093/qje/qjaa007