Project summary
Project A04 investigates how market outcomes are influenced by limited information and external impediments such as deadlines, cognitive load, and complexity. Decision impediments can engender but also amplify or attenuate behavioral biases. The project aims for a better understanding of the transmission mechanisms of biased behavior into market aggregates, providing insights to develop effective and fine-tuned recommendations on how to design and regulate markets. The focus in the third funding period lies in the regulation of modern marketplaces, which are often characterized by substantial decision impediments like product complexity, time demand, unmanageable numbers of choice options, and the interaction with AI agents, all of which may induce decision biases. Using a combination of experimental and theoretical approaches, the project will derive policy-relevant recommendations on topics such as consumer search behavior, targeted advertising, and privacy protocols.