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http://hdl.handle.net/10419/49408
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| Title: | | Age effects and heuristics in decision making  |
| Authors: | | Besedes, Tibor Deck, Carey Sarangi, Sudipta Shor, Mikhael |
| Issue Date: | | 2010 |
| Series/Report no.: | | Discussion papers // German Institute for Economic Research 1047 |
| Abstract: | | Using controlled experiments, we examine how individuals make choices when faced with multiple options. Choice tasks are designed to mimic the selection of health insurance, prescription drug, or retirement savings plans. In our experiment, available options can be objectively ranked allowing us to examine optimal decision making. First, the probability of a person selecting the optimal option declines as the number of options increases, with the decline being more pronounced for older subjects. Second, heuristics differ by age with older subjects relying more on suboptimal decision rules. In a heuristics validation experiment, older subjects make worse decisions than younger subjects. |
| Subjects: | | Experiments decision making optimal choice age effects heuristics |
| JEL: | | C91 D03 I18 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des DIW DIW-Diskussionspapiere
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