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When thinking under uncertainty, people often do not consider appropriately each of the relevant branches of a decision tree, as required by consequentialism. As a result they sometimes violate Savage's sure-thing principle. In the Prisoner's Dilemma game, for example, many subjects compete when they know that the opponent has competed and when they know(More)
This paper considers the role of reasons and arguments in the making of decisions. It is proposed that, when faced with the need to choose, decision makers often seek and construct reasons in order to resolve the conflict and justify their choice, to themselves and to others. Experiments that explore and manipulate the role of reasons are reviewed, and(More)
A previously unobserved pattern of choice behavior is predicted and corroborated. In line with the principle of compatibility, according to which the weighting of inputs is enhanced by their compatibility with output, the positive and negative dimensions of options (their pros and cons) are expected to loom larger when one is choosing and when one is(More)
The work of Tversky and Kahneman on intuitive probability judgment leads to the following prediction: The judged probability that an instance belongs to a category is an increasing function of the typicality of the instance in the category. To test this prediction, subjects in Experiment 1 read a description of a person (e.g., "Linda is 31, bright, ...(More)
Decision makers often pursue noninstrumental information--information that appears relevant but, if simply available, would have no impact on choice. Once they pursue such information, people then use it to make their decision. Consequently, the pursuit of information that would have had no impact on choice leads people to make choices they would not(More)
This paper examines the occurrence of framing effects when more thought is given to problems. In Study 1, participants were presented with one of two frames of several decision problems. Participants' Need for Cognition (NC) scores were obtained, and half the participants were asked to justify their choices. Substantial framing effects were observed, but(More)
Consumers need information to compare alternatives for markets to function efficiently. Recognizing this, public policies often pair competition with easy access to comparative information. The implicit assumption is that comparison friction—the wedge between the availability of comparative information and consumers' use of it—is inconsequential because(More)
Adoption of new agricultural technologies may be discouraged by their inherent riskiness. We implemented a randomized field experiment to ask whether provision of insurance against a major source of production risk induces farmers to take out loans to invest in a new crop variety. The study sample was composed of roughly 800 maize and groundnut farmers in(More)
Innovations for Poverty Action applies rigorous research techniques to develop and test solutions to real-world problems faced by the poor in developing countries. Contributions to this research made by a member of The Financial Access Initiative and Innovations for Poverty Action. ABSTRACT Firms spend billions of dollars each year advertising consumer(More)