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UCL Department of Economics

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Gavin Kader

Gavin Kader

gavin

Gavin Kader - Website
 

Research interests

Primary: Applied Theory, Revealed Preference Theory, Decision Theory and Behavioral Economics (Theory and Applied)
Secondary: Bounded Rationality, Applied Microeconomics

Paper Title - 'Choices with just noticeable differences or status quo - is there a (noticeable) difference?'

Abstract - I propose a choice theory that explains the well-documented phenomenon of status quo bias (SQB) with the concept of just-noticeable differences (JNDs). SQB comes from an inclination to choose a default option/current choice when decision-making, whereas a JND is the minimal stimulus required to be able to perceive change. I show that choice behaviour that is consistent with SQB can also be represented by JND utility, with the converse not necessarily true. \mo is a seminal paper in the literature of rational choice with SQB. As such, I propose an a generalised representation of SQB with the classic JND utility representation via minimal restrictions on normatively rational behaviour. Given that JNDs yield a potential explanation for SQB, I also show that it is possible to aggregate JND preferences over characteristics of goods in ways that are consistent (with or without SQB) with the overall choice of goods. 

References

  • Richard Blundell
  • Syngjoo Choi
  • Rani Spiegler
  • Terri Kneeland (teaching reference)