Memory, Attention, and Choice*
By P. Bordalo, N. Gennaioli, A. Shleifer. Quarterly Journal of Economics, 2020
276 citations recorded by the source corpus.
Building on a textbook description of associative memory (Kahana 2012), we present a model of choice in which a choice option cues recall of similar past experiences. Memory shapes valuation and decisions in two ways. First, recalled experiences form a norm, which serves as an initial anchor for valuation. Second, salient quality and price surprises relative to the norm lead to large adjustments in valuation. The model unifies many well-documented choice puzzles, including the attribution and projection biases, inattention to hidden attributes, background contrast effects, and context-dependent willingness to pay. Unifying these puzzles on the basis of selective memory and attention to surprise yields multiple new predictions.
Subfields: Economics and Econometrics, General Decision Sciences, Safety Research
View Paper: https://www.semanticscholar.org/paper/3655eab3ca9a1ba9bff92712770f2587358df49a
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Citations in the corpus
- Exposure to Daily Price Changes and Inflation Expectations (2019, unknown): “Recent models that depart from the rational-inattention framework (e.g., see Bordalo et al. (2019)), instead, generate the opposite prediction: Infrequent shoppers should rely more on the price changes they observe while shopping.”
- Misperceptions About Others (2021, unknown): “Perceptions about others might shift significantly between the time the treatments take place and the moment the behaviors occur, due to reasons such as regression to the mean, biased recall, or motivated memory (e.g., Bordalo et al. 2020).”
- How Do Expectations about the Macroeconomy Affect Personal Expectations and Behavior? (2020, result): “The medium-run learning rate (calculated using the follow-up) amounts to about 40 percent of the short-run learning rate (column 5 of Table 2), in line with respondents receiving new relevant signals about the macroeconomy between the two surveys and imperfect memory (Bordalo et al., 2017) (see also”
- Designing Information Provision Experiments (2020, unknown): “17For recent formal models of attention, see work by Bordalo et al. (2016, 2020); Gennaioli and Shleifer (2010).”