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Complexity, Mental Frames, and Neglect

67 Pages Posted: 24 Feb 2017  

Benjamin Enke

Harvard University

Date Written: February 22, 2017

Abstract

Many decision contexts require economic actors to learn from something they do not see, yet corresponding evidence on people’s cognition is scarce. In a tightly structured and transparent laboratory experiment, many subjects fully neglect what they do not see. A series of treatment variations uncovers that such neglect arises because a particular aspect of complexity induces an excessively narrow mental frame, so that people do not even notice or think about what they do not see. Thus, complexity generates errors in deliberate – and highly confident – statistical reasoning through its effect on how people mentally frame updating problems.

Keywords: Bounded Rationality; Complexity; Mental Frames; Attention

JEL Classification: D03; D80; D84

Suggested Citation

Enke, Benjamin, Complexity, Mental Frames, and Neglect (February 22, 2017). Available at SSRN: https://ssrn.com/abstract=2922274 or http://dx.doi.org/10.2139/ssrn.2922274

Benjamin Enke (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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