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Correlates of Narrow Bracketing

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  • Alexander K. Koch
  • Julia Nafziger

Abstract

Behavior often deviates from standard predictions because individuals evaluate the consequences of choices separately (i.e., narrow bracketing) rather than jointly. The main existing theories classify different narrow bracketing phenomena as either (i) choice errors caused by cognitive limitations, or (ii) strategies to achieve self‐control. Using an online experiment, we find consistent evidence for theory (ii): mental budgets and narrow goals are related to each other and to measures of self‐control, but are distinct from other forms of narrow bracketing. Evidence for the complementary theory (i) is less consistent: few choice bracketing phenomena are related to each other and to cognitive skills.

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  • Alexander K. Koch & Julia Nafziger, 2019. "Correlates of Narrow Bracketing," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(4), pages 1441-1472, October.
    • Handle: RePEc:bla:scandj:v:121:y:2019:i:4:p:1441-1472
    DOI: 10.1111/sjoe.12311
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    Cited by:

    1. Koch, Alexander K. & Nafziger, Julia, 2020. "Motivational goal bracketing: An experiment," Journal of Economic Theory, Elsevier, vol. 185(C).
    2. Arno Apffelstaedt & Lydia Mechtenberg, 2021. "Competition for Context-Sensitive Consumers," Management Science, INFORMS, vol. 67(5), pages 2828-2844, May.
    3. Andrew Ellis & David J. Freeman, 2024. "Revealing Choice Bracketing," American Economic Review, American Economic Association, vol. 114(9), pages 2668-2700, September.
    4. Lau Lilleholt, 2019. "Cognitive ability and risk aversion: A systematic review and meta analysis," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 14(3), pages 234-279, May.
    5. Werthschulte, Madeline & Löschel, Andreas, 2019. "Cost misperceptions and energy consumption: Experimental evidence for present bias and biased price beliefs," CAWM Discussion Papers 111, University of Münster, Münster Center for Economic Policy (MEP).
    6. repec:cup:judgdm:v:14:y:2019:i:3:p:234-279 is not listed on IDEAS
    7. Francesco Fallucchi & Marc Kaufmann, 2021. "Narrow Bracketing in Work Choices," Papers 2101.04529, arXiv.org, revised Feb 2021.
    8. Löschel, Andreas & Rodemeier, Matthias & Werthschulte, Madeline, 2023. "Can self-set goals encourage resource conservation? Field experimental evidence from a smartphone app," European Economic Review, Elsevier, vol. 160(C).
    9. Silva, Emmanuel Marques & Moreira, Rafael de Lacerda & Bortolon, Patricia Maria, 2023. "Mental Accounting and decision making: a systematic literature review," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 107(C).
    10. Werthschulte, Madeline & Löschel, Andreas, 2021. "On the role of present bias and biased price beliefs in household energy consumption," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).

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    More about this item

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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