IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/33466.html
   My bibliography  Save this paper

A Cognitive Theory of Reasoning and Choice

Author

Listed:
  • Pedro Bordalo
  • Nicola Gennaioli
  • Giacomo Lanzani
  • Andrei Shleifer

Abstract

We present a theory of decisions in which attention to the features of choice options is determined by the decision maker's categorization of the current choice problem in a set of problems she solved in the past. Categorization depends on goal-relevant as well as contextual problem-level features. The model yields systematic heterogeneity in attention and choice in a given problem based on different past experiences, rigidity of choices when categorization does not change despite new data, and discontinuous shifts when changes in bottom-up salient features cause re-categorization. The model unifies major puzzles and framing effects in riskless, statistical, and lottery choice based on heterogenous and unstable mental representations.

Suggested Citation

  • Pedro Bordalo & Nicola Gennaioli & Giacomo Lanzani & Andrei Shleifer, 2025. "A Cognitive Theory of Reasoning and Choice," NBER Working Papers 33466, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33466
    Note: AP
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w33466.pdf
    Download Restriction: Access to the full text is generally limited to series subscribers, however if the top level domain of the client browser is in a developing country or transition economy free access is provided. More information about subscriptions and free access is available at http://www.nber.org/wwphelp.html. Free access is also available to older working papers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:33466. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/nberrus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.