Date of this Version
Games and Economic Behavior
This paper presents a model of choice based on imperfect memory and self-deception. I assume that people have preferences over their own attributes (e.g., skill, knowledge, or competence) and can manipulate their memories. The model provides a prior-dependent theory of regret aversion and allows for prior-dependent information attitudes. It implies that behavior will converge to the one predicted by expected utility theory after a choice has been faced a sufficiently large number of times.
© 2014. This manuscript version is made available under the CC-BY-NC-ND 4.0 license http://creativecommons.org/licenses/by-nc-nd/4.0/
memory, self deception, behavioral economics
Gottlieb, D. A. (2014). Imperfect Memory and Choice Under Risk. Games and Economic Behavior, 85 127-158. http://dx.doi.org/10.1016/j.geb.2013.11.013
Date Posted: 27 November 2017
This document has been peer reviewed.