A theory of preferences was recently proposed on how consumers’ choices depend on both stable “inherent” likings and sensitivity to framing, task, and context effects (Simonson, 2008). Managers can employ this approach to overcome the contradictions exhibited so far in their treatment of...

We introduce and test a behavioral model of consumer product search that extends a baseline normative model of sequential search by incorporating nonnormative influences that are local in the sense that they reflect consumers' undue sensitivity to recently encountered alternatives. We propose...

The implications of Salisbury and Feinberg's (2010) paper [Salisbury, L. C., F. M. Feinberg. 2010. Alleviating the constant stochastic variance assumption in decision research: Theory, measurement, and experimental test. (1) 1–17] for the process of model development and testing in the field...

Dual process models conceptualize two systems of processing that are activated when presented with a decision task, the quick and affective System 1 and the deliberative and rule-based System 2. In this article, we explore whether the affective component of System 1 has the potential to...

Normative models of choice assert axiomatically that preferences are consistent, coherent, and determined only by relevant alternatives. In contrast to this classical economic perspective, behavioral models derived from research in psychology and consumer behavior assert that preferences are not...

Noncompensatory decision making forms a core part of poliheuristic theory. At the same time, decision making under constraints is a common view among expected utility theorists. It is argued that poliheuristic theory permits one to endogenize constraints. Views about the rules ofwar are used to...

Rationality is a complex behavioral theory that can be parsed into statements about preferences, perceptions, and process. This paper looks at the evidence on rationality that is provided by behavioral experiments, and argues that most cognitive anomalies operate through errors in perception...

This paper explores how fractional demands (the optimal fraction of wealth invested in a security) change upon exogenous changes in security returns and wealth. In the first part of the paper, the analysis is conducted in an Arrow-Debreu framework. Here we demonstrate the counterintuitive but...

Studies in the psychology of individual choice have identified numerous cognitive and other bounds on human rationality, often producing systematic errors and biases. Yet for the most part models of aggregate phenomena in management science and economics are not consistent with such...

The decision rules in simulation models of human behavior purport to describe decision-making behavior as it is and not as it should optimally be. Without the criterion of optimality to judge the appropriateness of a decision rule, simulation modelers must rely on empirical confirmation of the...