TOO PROUD TO STOP: REGRET IN DYNAMIC DECISIONS

• 成果类型: Article
• 署名作者: Strack, Philipp; Viefers, Paul
• 署名单位: Yale University
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvz073
• 发表日期: 2021
• 页码: 165-199
• 关键词: choice; disposition; search; experience; BEHAVIOR; winners; models; losers

摘要

Regret and its anticipation affect a wide range of decisions. Job-seekers reject offers while waiting for an offer to match their best past offer; investors hold on to badly performing stocks; and managers throw good money after bad projects. We analyze behavior of a decision maker with regret preferences in a dynamic context and show that regret agents have a disposition to gamble until they receive a payoff matching the best past offer. Results from a lab experiment confirm that many subjects exhibit such behavior and are reluctant to stop below the past peak.