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Regret theory and the tyranny of choice

By Ben Irons and Cameron Hepburn


As economists, we tend to accept the principle that more choice cannot make us worse off. However, recent evidence from laboratory and field experiments suggests that more choice can inhibit decision-making and reduce search in many situations, potentially reducing welfare. This paper provides a formal theoretical foundation for these observations by embedding the regret theory of Loomes and Sugden (1982) in three search models. Beyond a threshold number of options, we find that ‘less is more’: agents who experience regret have lower utility as the number of options is increased

Topics: HB Economic Theory
Publisher: Wiley-Blackwell on behalf of The Economic Society of Australia
Year: 2007
DOI identifier: 10.1111/j.1475-4932.2007.00393.x
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Provided by: LSE Research Online
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