On the Magnification of Small Biases in Decision-Making

We analyze a setting in which an actor learns about and then chooses one item from a set of N ex ante identical options. Under fairly general conditions, a large amount of effort is expended learning about one arbitrarily chosen option, less on another, etc. Unequal efforts cause unequal selection likelihoods, magnifying small differences in priors. We also show that a glass ceiling can arise, in which the magnification is greater as the importance of the choice increases. These results have important implications for employment outcomes and optimal policy responses

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Year of publication:	2020
Authors:	Davies, Shaun
Other Persons:	Van Wesep, Edward Dickersin (contributor) ; Waters, Brian (contributor)
Publisher:	[2020]: [S.l.] : SSRN
Subject:	Entscheidung \| Decision \| Theorie \| Theory \| Systematischer Fehler \| Bias \| KMU \| SME

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