Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model
Recent psychological research indicates that consumers that search exhaustively for the best option of a market product—known as maximizers—eventually feel worse than consumers who just look for something good enough—called satisficers. We formulate a time allocation model to explore the relationshi...
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| Format: | Article |
| Language: | English |
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Wiley
2014-01-01
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| Series: | Abstract and Applied Analysis |
| Online Access: | http://dx.doi.org/10.1155/2014/569054 |
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| author | Francisco Álvarez José-Manuel Rey Raúl G. Sanchis |
| author_facet | Francisco Álvarez José-Manuel Rey Raúl G. Sanchis |
| author_sort | Francisco Álvarez |
| collection | DOAJ |
| description | Recent psychological research indicates that consumers that search exhaustively for the best option of a market product—known as maximizers—eventually feel worse than consumers who just look for something good enough—called satisficers. We formulate a time allocation model to explore the relationship between different distributions of prices of the product and the satisficing behavior and the related welfare of the consumer. We show numerically that, as the number of options becomes large, the maximizing behavior produces less and less welfare and eventually leads to choice paralysis—these are effects of choice overload—whereas satisficing conducts entail higher levels of satisfaction and do not end up in paralysis. For different price distributions, we provide consistent evidence that maximizers are better off for a low number of options, whereas satisficers are better off for a sufficiently large number of options. We also show how the optimal satisficing behavior is affected when the underlying price distribution varies. We provide evidence that the mean and the dispersion of a symmetric distribution of prices—but not the shape of the distribution—condition the satisficing behavior of consumers. We also show that this need not be the case for asymmetric distributions. |
| format | Article |
| id | doaj-art-00c34a9d869e45d0abbe0567e08a07f4 |
| institution | OA Journals |
| issn | 1085-3375 1687-0409 |
| language | English |
| publishDate | 2014-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Abstract and Applied Analysis |
| spelling | doaj-art-00c34a9d869e45d0abbe0567e08a07f42025-08-20T02:02:48ZengWileyAbstract and Applied Analysis1085-33751687-04092014-01-01201410.1155/2014/569054569054Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation ModelFrancisco Álvarez0José-Manuel Rey1Raúl G. Sanchis2Department of Quantitative Economics, Complutense University of Madrid, Campus de Somosaguas, 28223 Madrid, SpainDepartment of Economic Analysis, Complutense University of Madrid, Campus de Somosaguas, 28223 Madrid, SpainRCC at Harvard University, 26 Trowbridge Street, Cambridge, MA 02138, USARecent psychological research indicates that consumers that search exhaustively for the best option of a market product—known as maximizers—eventually feel worse than consumers who just look for something good enough—called satisficers. We formulate a time allocation model to explore the relationship between different distributions of prices of the product and the satisficing behavior and the related welfare of the consumer. We show numerically that, as the number of options becomes large, the maximizing behavior produces less and less welfare and eventually leads to choice paralysis—these are effects of choice overload—whereas satisficing conducts entail higher levels of satisfaction and do not end up in paralysis. For different price distributions, we provide consistent evidence that maximizers are better off for a low number of options, whereas satisficers are better off for a sufficiently large number of options. We also show how the optimal satisficing behavior is affected when the underlying price distribution varies. We provide evidence that the mean and the dispersion of a symmetric distribution of prices—but not the shape of the distribution—condition the satisficing behavior of consumers. We also show that this need not be the case for asymmetric distributions.http://dx.doi.org/10.1155/2014/569054 |
| spellingShingle | Francisco Álvarez José-Manuel Rey Raúl G. Sanchis Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model Abstract and Applied Analysis |
| title | Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model |
| title_full | Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model |
| title_fullStr | Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model |
| title_full_unstemmed | Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model |
| title_short | Choice Overload, Satisficing Behavior, and Price Distribution in a Time Allocation Model |
| title_sort | choice overload satisficing behavior and price distribution in a time allocation model |
| url | http://dx.doi.org/10.1155/2014/569054 |
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