Search, Memory, and Choice: An Experiment
24 Pages Posted: 23 Jul 2014
Date Written: July 22, 2014
Multiple attribute search is a central feature of economic life: we consider much more than price when purchasing a home, and more than wage when choosing a job. Search behavior in these environments has recently been found to deviate systematically and substantially from optimal sequential search. While these deviations cannot be explained by previously existing models, they are consistent with memory load minimizing search behavior, according to the predictions of a new model. In order to investigate whether this consistency is more than a coincidence, and to explore the effects of memory load on choice, more generally, an experiment is conducted. In each task, subjects are made to search the same information in one of two orders; a high, or a low memory load order; standard models of choice treat such variations in order of acquisition as irrelevant. Nevertheless, low memory load searchers are found to commit substantially fewer choice errors than high memory load searchers. This result supports the conjecture of a rational mechanism for observed deviations from optimal search: by searching in a way that reduces memory load one sacrifices value of information in exchange for reduced choice error.
Keywords: Search Theory; Multiple Attributes; Working Memory; Consumer Choice; Complexity; Procedural Cognition; Information Overload
JEL Classification: D11, D12, D81, D83
Suggested Citation: Suggested Citation