Abstract

http://ssrn.com/abstract=876108
 
 

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Decisions by Rules: The Case of Unwillingness to Pay for Beneficial Delays


On Amir


University of California, San Diego (UCSD) - Rady School of Management

Dan Ariely


Duke University - Fuqua School of Business

January 10, 2006


Abstract:     
Since the emergence of neoclassical economics, individual decision making has been viewed largely from an outcome-maximizing perspective. Building on previous work, the authors suggest that when people make payment decisions, they consider not only their preferences for different alternatives but also guiding principles and behavioral rules. The authors describe and test two characteristics pertaining to one specific rule that dictates consumers should not pay for delays, even if they are beneficial: rule invocation and rule override. The results show that money can function as the invoking cue for this rule, that the reliance on this rule can undermine utility maximization, and that this rule may be used as a first response to the decision problem but can be overridden. The article ends with a discussion of more general applications of such rules, which may explain some of the seemingly systematic inconsistencies in the ways consumers behave.

Number of Pages in PDF File: 32

Keywords: Decision making, rules, intertemporal choice

JEL Classification: M31, D91

working papers series





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Date posted: January 23, 2006  

Suggested Citation

Amir, On and Ariely, Dan, Decisions by Rules: The Case of Unwillingness to Pay for Beneficial Delays (January 10, 2006). Available at SSRN: http://ssrn.com/abstract=876108 or http://dx.doi.org/10.2139/ssrn.876108

Contact Information

On Amir (Contact Author)
University of California, San Diego (UCSD) - Rady School of Management ( email )
9500 Gilman Drive
Rady School of Management
La Jolla, CA 92093
United States
858-534-2023 (Phone)
858-534-0745 (Fax)
HOME PAGE: http://management.ucsd.edu/faculty/directory/amir/
Dan Ariely
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
(919) 381-4366 (Phone)
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