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Are Two Bads Better Than One? A Model of Sensory Limitations

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  • Lars J. Lefgren
  • Olga B. Stoddard
  • John E. Stovall

Abstract

We present a theoretical framework which explains the optimizing behavior of individuals who are exposed to many latent stimuli but prone to experience only the most salient one. We show that individuals with such preferences may find it optimal to engage in seemingly dysfunctional behavior such as self-harm. Our model also explains the behavior of individuals experiencing depression or trapped by multiple competing problems. We present experimental evidence suggesting such preferences explain the behavior of more than two thirds of subjects exposed to single and multiple painful stimuli.

Suggested Citation

  • Lars J. Lefgren & Olga B. Stoddard & John E. Stovall, 2018. "Are Two Bads Better Than One? A Model of Sensory Limitations," NBER Working Papers 25060, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:25060
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    Cited by:

    1. Kristoffersen, Ingebjørg & Hoang, Dan & Li, Ian W., 2024. "Understanding the mental health-based poverty trap: Dynamics in psychological distress and financial precariousness, and the role of self-efficacy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 111(C).

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    More about this item

    JEL classification:

    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • I1 - Health, Education, and Welfare - - Health

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