Economic Rationality under Cognitive Load
Bibliographic Data
| ID | 9718803 |
|---|---|
| Authors | Andreas C Drichoutis (0000-0002-4082-4560, Agricultural University of Athens), Rodolfo M Nayga (0000-0002-6908-4332, University of Arkansas) |
| Year | 2020 |
| Volume | 130 |
| Issue | 632 |
| Pages | 2382-2409 |
| Publication date | 2020-11-23 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (PUBLISHER • GB) |
| DOI | 10.1093/ej/ueaa052 |
| OpenAlex | W2750771424 |
| Language | EN |
| Citations received | 4 |
| References cited | 60 |
Economic analysis assumes that consumer behaviour can be rationalised by a utility function. Previous research has shown that some consistency of choices with economic rationality can be captured by permanent cognitive ability. No other known study however has examined how a temporary load in subjects’ working memory can affect economic rationality. Using two controlled laboratory experiments, we exogenously vary cognitive load by asking subjects to memorise a number while they undertake an induced budget allocation task (Choi et al., 2007a, b). Using a number of manipulation checks, we verify that cognitive load has adverse effects on subjects’ performance in reasoning tasks. However, we find no effect in any of the goodness-of-fit measures that measure consistency of subjects’ choices with the Generalized Axiom of Revealed Preference (GARP), despite having a sample size large enough to detect even small differences between treatments with 80% power. We also find no effect on first-order stochastic dominance and risk preferences. Our finding suggests that economic rationality can be attained even when subjects are placed under temporary working memory load, despite the fact that the load has adverse effects in reasoning tasks
Anxiety · Cognition · Cognitive Load · Cognitive psychology · Consistency (knowledge bases · Economics · Function (biology · Memorization · Microeconomics · Rationality · Sample (material · Satisficing · Working memory · Worry · Artificial Intelligence · Computer Science · Decision-Making and Behavioral Economics · Experimental Behavioral Economics Studies · Financial Markets and Investment Strategies · Psychology · Social Psychology
The Construction of Utility Functions from Expenditure Data
The Nonparametric Approach to Demand Analysis
Who Is ‘Behavioral’? Cognitive Ability and Anomalous Preferences
Intelligence
Working memory capacity and its relation to general intelligence
Subject pool recruitment procedures
Development of Abbreviated Nine-Item Forms of the Raven’s Standard Progressive Matrices Test
Implications of rational inattention
Consort 2010 Explanation and Elaboration
Stereotypes as Judgmental Heuristics
The Cognitive Reflection Test as a predictor of performance on heuristics-and-biases tasks
Working Memory Capacity as Executive Attention
Reasoning ability is (little more than) working-memory capacity?!
Z-Tree
Two Simple Algorithms for Generating a Subset of Data Consistent With Warp and Other Binary Relations
Measuring Rationality with the Minimum Cost of Revealed Preference Violations
Standards for Experimental Research
The Money Pump as a Measure of Revealed Preference Violations
The Money Pump as a Measure of Revealed Preference Violations
A New Series of Perceptual Tests
Matching as Nonparametric Preprocessing for Reducing Model Dependence in Parametric Causal Inference
Recent Developments in the Econometrics of Program Evaluation
A meta-analysis on the relation between reading and working memory
Understanding and misunderstanding randomized controlled trials
Cognitive Reflection and Decision Making
| Unique citing works | 4 |
|---|---|
| Citations per year | 2 |
| Citation span | 2024 - 2026 (3) |
| Citation velocity | current |
| Highly cited | No |
| Citation types | Neutral: 4 |