Revealing Choice Bracketing

S-Tier
Journal: American Economic Review
Year: 2024
Volume: 114
Issue: 9
Pages: 2668-2700

Score contribution per author:

4.022 = (α=2.01 / 2 authors) × 4.0x S-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

Experiments suggest that people fail to take into account interdependencies between their choices—they do not broadly bracket. Researchers often instead assume people narrowly bracket, but existing designs do not test it. We design a novel experiment and revealed preference tests for how someone brackets their choices. In portfolio allocation under risk, social allocation, and induced-value shopping experiments, 40–43 percent of subjects are consistent with narrow bracketing, and 0–16 percent with broad bracketing. Adjusting for each model's predictive precision, 74 percent of subjects are best described by narrow bracketing, 13 percent by broad bracketing, and 6 percent by intermediate cases.

Technical Details

RePEc Handle
repec:aea:aecrev:v:114:y:2024:i:9:p:2668-2700
Journal Field
General
Author Count
2
Added to Database
2026-01-25