Complexity and biases

Kalayci, Kenan and Serra-Garcia, Marta (2015) Complexity and biases. Experimental Economics, 19 1: 31-50. doi:10.1007/s10683-015-9434-3

Author Kalayci, Kenan
Serra-Garcia, Marta
Title Complexity and biases
Journal name Experimental Economics   Check publisher's open access policy
ISSN 1386-4157
Publication date 2015-03-05
Year available 2015
Sub-type Article (original research)
DOI 10.1007/s10683-015-9434-3
Open Access Status
Volume 19
Issue 1
Start page 31
End page 50
Total pages 20
Place of publication New York, United States
Publisher Springer New York LLC
Collection year 2016
Language eng
Abstract We examine experimentally how complexity affects decision-making, when individuals choose among different products with varying benefits and costs. We find that complexity in costs leads to choosing a high-benefit product, with high costs and overall lower payoffs. In contrast, when complexity is in the benefits of the product, we cannot reject the hypothesis of random mistakes. We also examine the role of heterogeneous complexity. We find that individuals still (mistakenly) choose the high-benefit but costly product, even if cheaper and simple products are available. Our results suggest that salience is a main driver of choices under different forms of complexity.
Keyword Complexity
Credit Choice
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2016 Collection
School of Economics Publications
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