Cost-benefit analysis in reasoning
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- dc.contributor.author Alaoui, Larbi
- dc.contributor.author Penta, Antonio
- dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
- dc.date.accessioned 2024-11-14T10:10:11Z
- dc.date.available 2024-11-14T10:10:11Z
- dc.date.issued 2018-10-08
- dc.date.modified 2024-11-14T10:06:03Z
- dc.description.abstract When an individual thinks about a problem, his decision to reason further may involve a tradeo between cognitive costs and a notion of value. But it is not obvious that this is always the case, and the value of reasoning is not well-dened. This pa- per analyzes the primitive properties of the reasoning process that must hold for the decision to stop thinking to be represented by a cost-benet analysis. We nd that the properties that characterize the cost-benet representation are weak and intuitive, suggesting that such a representation is justied for a large class of problems. We then provide additional properties that give more structure to the value of reasoning func- tion, including `value of information' and `maximum gain' representations. We show how our model applies to a variety of settings, including contexts involving sequential heuristics in choice, response time, reasoning in games and research. Our model can also be used to understand economically relevant patterns of behavior for which the cost-benet approach does not seem to hold. These include choking under pressure and (over)thinking aversion.
- dc.format.mimetype application/pdf*
- dc.identifier https://econ-papers.upf.edu/ca/paper.php?id=1621
- dc.identifier.citation Journal of Political Economy, Volume 130, Number 4 April 2022
- dc.identifier.uri http://hdl.handle.net/10230/44783
- dc.language.iso eng
- dc.relation.ispartofseries Economics and Business Working Papers Series; 1621
- dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
- dc.rights.accessRights info:eu-repo/semantics/openAccess
- dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
- dc.subject.keyword cognition and incentives
- dc.subject.keyword choice theory
- dc.subject.keyword reasoning
- dc.subject.keyword fact-free learning
- dc.subject.keyword sequential heuristics
- dc.subject.keyword Microeconomics
- dc.title Cost-benefit analysis in reasoning
- dc.title.alternative
- dc.type info:eu-repo/semantics/workingPaper