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The relevance of irrelevant information

Published online by Cambridge University Press:  14 March 2025

Ian Chadd ,
Emel Filiz-Ozbay Open the ORCID record for Emel Filiz-Ozbay [Opens in a new window]  and
Erkut Y. Ozbay
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
*
chaddi@rpi.edu
efozbay@umd.edu
ozbay@umd.edu
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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.

Keywords

Presentation setBounded rationalitySimplicityCostly ignoranceFree disposal of information

JEL classification

D91: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ D83: Search • Learning • Information and Knowledge • Communication • Belief • Unawareness
Type
Original Paper
Information
Experimental Economics , Volume 24 , Issue 3 , September 2021 , pp. 985 - 1018
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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