The Relevance of Irrelevant Information
62 Pages Posted: 8 Mar 2018 Last revised: 7 Jan 2020
Date Written: July 9, 2018
This paper experimentally investigates the eﬀect of introducing unavailable alternatives and irrelevant information regarding the alternatives on the optimality of decisions in choice problems. We ﬁnd that interaction between the unavailable alternatives and irrelevant information regarding the alternatives generates suboptimal decisions. Irrelevant information in any dimension increases the time costs of decisions. We also identify a pure “preference for simplicity” beyond the desire to make optimal decisions or minimize time spent on a decision problem. Our results imply that the presentation set, distinct from the alternative set, needs to be a part of decision making models.
Keywords: Presentation set, bounded rationality, simplicity, costly ignorance
JEL Classification: D03, D83, D91
Suggested Citation: Suggested Citation