Look before you leap: continuously evolving utility representations and the attraction effect

Fagan, Christian (2012) Look before you leap: continuously evolving utility representations and the attraction effect. Undergraduate Thesis, University of Pittsburgh. (Unpublished)

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Abstract

We study a decision-maker who is presented with a menu of three options to consume. The options are such that two of the bundles are extremely similar, though one is demonstrably inferior to the remaining options. We propose and analyze a model in which the decision-maker's preferences change continuously as he is initially
presented with information before learning his true preferences. The decision-maker initially exhibits what is known as the "attraction effect," whereby he is influenced by the similarity in his choice set. As time passes the attraction effect diminshes and the decision-maker's
decision-making is aligned with the Tversky hypothesis, the antithetical counterpart to the attraction effect. The decision-maker's optimal behavior depends on his patience and capacity for learning in addition to his baseline preferences.

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Details

Item Type:	University of Pittsburgh ETD
Status:	Unpublished
Creators/Authors:	Creators Email Pitt Username ORCID Fagan, Christian caf70@pitt.edu CAF70
ETD Committee:	Title Member Email Address Pitt Username ORCID Committee Chair Rigotti, Luca luca@pitt.edu LUCA Committee Member Bhattacharya, Sourav sourav@pitt.edu SOURAV Committee Member Teper, Roee rteper@pitt.edu RTEPER Lleras, Juan Sebastian jslleras@andrew.cmu.edu
Date:	24 May 2012
Date Type:	Publication
Defense Date:	19 April 2012
Approval Date:	24 May 2012
Submission Date:	20 April 2012
Access Restriction:	No restriction; Release the ETD for access worldwide immediately.
Number of Pages:	19
Institution:	University of Pittsburgh
Schools and Programs:	David C. Frederick Honors College Dietrich School of Arts and Sciences > Economics
Degree:	BPhil - Bachelor of Philosophy
Thesis Type:	Undergraduate Thesis
Refereed:	Yes
Uncontrolled Keywords:	attraction effect, similarity hypothesis, preference reversal, cost of thinking, homeomorphism, homotopy
Date Deposited:	24 May 2012 18:40
Last Modified:	15 Nov 2016 13:57
URI:	http://d-scholarship.pitt.edu/id/eprint/11926

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