Memory, Attention, and Choice
Pedro Bordalo, Nicola Gennaioli, Andrei Shleifer
The Quarterly Journal of Economics / NBER · 2020
Abstract
Develops a theory in which valuation and belief depend on what a decision maker recalls, with memory cued by similarity to the current context—linking selective recall to systematic distortions in choice and probability judgment.
Methodology
A formal model of similarity-based recall in which the choice context selectively retrieves comparison experiences from memory, generating context-dependent valuations; predictions are connected to experimental evidence.
Findings
Because the current situation cues recall of similar past experiences, valuations and probability estimates shift with context in predictable ways, offering a memory-based foundation for reference dependence, framing, and over/under-reaction to information.
Applied nudge
The comparisons you make available at the moment of choice become the user's reference set—curate the cues and examples on screen, because what is recalled anchors what is valued.
Citation
Bordalo, P., Gennaioli, N., & Shleifer, A. (2020). Memory, attention, and choice. Quarterly Journal of Economics, 135(3), 1399-1442.
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