The Role of Memory in Search and Choice
50 Pages Posted: 13 Aug 2014 Last revised: 24 Aug 2014
Date Written: August 23, 2014
The choice literature has recently called for a better understanding of how people form the consideration sets of alternatives from which they choose, and the role of cognitive limitations on the choice process. This study makes advances on both fronts by introducing, and analyzing, a model of working memory load -- a well-known cognitive bottleneck in decision-making -- in pre-choice search behavior. The model allows testable predictions about how consideration sets are formed, can explain several puzzling patterns of behavior observed in rich search and choice settings, and when tested in an experiment is found to track choice error rates well. Further, the model allows observed search behavior to be used not only to reveal what alternatives are being considered for choice, but also to predict when a choice error is more likely to occur, which is useful for assessing the welfare implications of observed choices.
Keywords: Consumer Choice, Search Theory, Bounded Rationality, Procedural Cognition, Working Memory, Multiple Attributes, Information Overload, Eye-tracking
JEL Classification: D11, D12, D81, D83
Suggested Citation: Suggested Citation