Biases and Decision Impairments in Markets

Project summary

Project A04 studies systematic deviations from rational behavior caused by “decision impairments” such as deadlines, cognitive load, complexity of the decision environment, and similar influences. Decision impairments can engender but also amplify or attenuate behavioral biases. Using economic experiments, the goal of the project is to identify the effects of decision impairments on individual behavioral biases, as well as to investigate how markets shape the role of impairments when aggregating individual biases. In the second funding phase, A04 focuses particularly on decision makers’ awareness of the relationship between specific decision impairments and behavioral biases.