Paul Feldman (TAMU)

Title: "Deliberation and Differences Determine Difficult Decisions" joint with David Buschena and David Zilberman

Abstract: We propose a dual-process similarity-based explanation for when and how choices are made. Our explanation differs from prior work in that it does not rely on subjective distance in preferences. To validate our explanation, we derive sharp, testable predictions and use an incentivized laboratory experiment. Specifically, we employ the canonical paradigm (for violations of expected utility) of binary choices between lotteries with at most three outcomes. We validate our explanation by predicting specific non-monotonicities in response times and reconciling seemingly inconsistent choices under risk. Our economic explanation, based on how individuals adopt different dual-process choices, predicts when and how these risky choices are made.