The poor often behave in less capable ways, which can further perpetuate poverty. We hypothesize that poverty directly impedes cognitive function and present two studies test this hypothesis. First, we experimentally induced thoughts about finances found reduces performance among but not well-off participants. Second, examined the of farmers over planting cycle. same farmer shows diminished before harvest, when poor, as compared with after rich. This cannot be explained by differences time...

Poor individuals often engage in behaviors, such as excessive borrowing, that reinforce the conditions of poverty. Some explanations for these behaviors focus on personality traits poor. Others emphasize environmental factors housing or financial access. We instead consider how certain stem simply from having less. suggest scarcity changes people allocate attention: It leads them to more deeply some problems while neglecting others. Across several experiments, we show attentional shifts can...

Choice often produces conflict. This notion, however, plays no role in classical decision theory, which each alternative is assigned a value, and the maker selects from every choice set option with highest value. We contrast this principle of value maximization hypothesis that to delay or seek new alternatives more likely be selected when conflict high than it low. supported by several studies showing tendency defer decision, search for alternatives, choose default can increased offered...

An argument is categorical if its premises and conclusion are of the form All members ofC have property F, where C a natural category like FALCON or BIRD, P remains same across conclusion. example Grizzly bears love onions. Therefore, all Such an psychologically strong to extent that belief in engenders A subclass arguments examined, following hypothesis advanced: The strength increases with (a) degree which premise categories similar (b) lowest level includes both categories. model based on...

The term "money illusion" refers to a tendency think in terms of nominal rather than real monetary values. Money illusion has significant implications for economic theory, yet it implies lack rationality that is alien economists. This paper reviews survey questions regarding people's reactions variations inflation and prices, designed shed light on the psychology underlies money illusion. We propose people often about transactions both terms, arises from an interaction between these...

One of the basic axioms rational theory decision under uncertainty is Savage's (1954) sure-thing principle (STP) It states that if prospect x preferred to y knowing Event A occurred, and did not occur, then should be even when it known whether occurred We present examples in which maker has good reasons for accepting occurs, different does occur Not or however, may lack a clear reason opt another option suggest that, presence uncertainty, people are often reluctant think through implications...

Firms spend billions of dollars developing advertising content, yet there is little field evidence on how much or it affects demand. We analyze a direct mail experiment in South Africa implemented by consumer lender that randomized loan price, and offer deadlines simultaneously. find content significantly Although was difficult to predict ex ante which specific features would matter most this context, the do have large effects. Showing fewer example loans, not suggesting particular use for...

Standard theorizing about poverty falls into two camps. Social scientists regard the behaviors of economically disadvantaged either as calculated adaptations to prevailing circumstances or emanating from a unique culture poverty, rife with deviant values. The first camp presumes that people are highly rational, they hold coherent and justified beliefs pursue their goals effectively, without mistakes, no need for help. second attributes poor variety psychological attitudinal short-fallings...

<h3>Objective.</h3> —To determine whether situations involving multiple options can paradoxically influence people to choose an option that would have been declined if fewer were available. <h3>Design.</h3> —Mailed survey containing medical scenarios formulated in one of two versions. <h3>Participants.</h3> —Two groups physicians: members the Ontario College Family Physicians (response rate=77%; n=287) and neurologists neurosurgeons affiliated with North American Symptomatic Carotid...

This article considers several aspects of the economic decision making poor from perspective behavioral economics, and it focuses on potential contributions marketing. Among other things, authors consider some relevant facets social institutional environments in which interact, they review patterns that are likely to arise these contexts. A behaviorally more informed can help make sense what might otherwise be considered “puzzles” comportment poor. analysis suggests substantial welfare...

Economic models of decision making assume that people have a stable way thinking about value. In contrast, psychology has shown people's preferences are often malleable and influenced by normatively irrelevant contextual features. Whereas economics derives its predictions from the assumption navigate world scarce resources, recent psychological work do not attend to scarcity. this article, we show when scarcity does influence cognition, it renders less susceptible classic context effects....

Consumers need information to compare alternatives for markets function efficiently. Recognizing this, public policies often pair competition with easy access comparative information. The implicit assumption is that comparison friction—the wedge between the availability of and consumers' use it—is inconsequential because when readily available, consumers will this make effective choices. We examine extent friction in market Medicare Part D prescription drug plans United States. In a...

Abstract This paper examines the occurrence of framing effects when more thought is given to problems. In Study 1, participants were presented with one two frames several decision Participants' Need for Cognition (NC) scores obtained, and half asked justify their choices. Substantial observed, but amount purportedly a problem, whether manipulated by justification elicitation or measured NC scores, did not reduce incidence effects. 2, responded both problems in within‐subjects design. Again,...

This study reveals that when remembering past decisions, people engage in choice-supportive memory distortion. When asked to make attributions of options' features, participants made source-monitoring errors supported their decisions. They tended attribute, both correctly and incorrectly, more positive features the option they had selected than its competitor. In addition, sometimes attributed, negative nonselected option. pattern distortion may be beneficial people's general well-being,...

ABSTRACT Most theories of motivation and behavior (and lay intuitions alike) consider pain effort to be deterrents. In contrast this widely held view, we provide evidence that the prospect enduring exerting for a prosocial cause can promote contributions cause. Specifically, show willingness contribute charitable or collective increases when contribution process is expected painful effortful rather than easy enjoyable. Across five experiments, document “martyrdom effect,” observed patterns...

Recent research has studied how resource scarcity draws attention and creates cognitive load. As a result, improves some dimensions of function, while worsening others. Still, there remains fundamental question: does influence the content cognition? In this article, we find that poor individuals (i.e., those facing monetary scarcity) see many everyday experiences through different lens. Specifically, thoughts about cost money are triggered by mundane circumstances, they difficult to...