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The relevance of irrelevant information

Author

Listed:
  • Ian Chadd

    (Rensselaer Polytechnic Institute)

  • Emel Filiz-Ozbay

    (University of Maryland)

  • Erkut Y. Ozbay

    (University of Maryland)

Abstract

This paper experimentally investigates the effect of introducing unavailable alternatives and irrelevant information regarding the alternatives on the optimality of decisions in choice problems. We find that the presence of unavailable alternatives and irrelevant information generates suboptimal decisions with the interaction between the two amplifying this effect. Irrelevant information in any dimension increases the time costs of decisions. We also identify a “preference for simplicity” beyond the desire to make optimal decisions or minimize time spent on a decision problem.

Suggested Citation

  • Ian Chadd & Emel Filiz-Ozbay & Erkut Y. Ozbay, 2021. "The relevance of irrelevant information," Experimental Economics, Springer;Economic Science Association, vol. 24(3), pages 985-1018, September.
    • Handle: RePEc:kap:expeco:v:24:y:2021:i:3:d:10.1007_s10683-020-09687-3
    DOI: 10.1007/s10683-020-09687-3
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    References listed on IDEAS

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    Cited by:

    1. Eugenio Levi & Abhijit Ramalingam, 2023. "Absolute vs. relative poverty and wealth: Cooperation in the presence of between-group inequality," MUNI ECON Working Papers 2023-09, Masaryk University.
    2. Chadd, Ian, 2023. "Random network consideration: Theory and experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 211(C), pages 251-269.

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    More about this item

    Keywords

    Presentation set; Bounded rationality; Simplicity; Costly ignorance; Free disposal of information;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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