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The relevance of irrelevant information

Published online by Cambridge University Press:  14 March 2025

Ian Chadd*
Affiliation:
Department of Economics, Rensselaer Polytechnic Institute, Troy, NY, USA
Emel Filiz-Ozbay*
Affiliation:
Department of Economics, University of Maryland, College Park, MD, USA
Erkut Y. Ozbay*
Affiliation:
Department of Economics, University of Maryland, College Park, MD, USA

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.

Type
Original Paper
Copyright
Copyright © 2020 Economic Science Association

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Footnotes

Electronic supplementary material The online version of this article (https://doi.org/10.1007/s10683-020-09687-3) contains supplementary material, which is available to authorized users.

We thank Gary Charness, Mark Dean, Allan Drazen, Daniel Martin, Yusufcan Masatlioglu, Pietro Ortoleva, Ariel Rubinstein, and Lesley Turner for helpful comments and fruitful discussions. We also would like to thank our anonymous reviewers for useful suggestions.

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