Department of Economics and Business Economics

Correlates of Narrow Bracketing

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We examine whether different phenomena of narrow bracketing can be traced back to some common characteristic and whether and how different phenomena are related. We find that making dominated lottery choices or ignoring the endowment when making risky choices are related phenomena and are both associated with low levels of cognitive reflection. In contrast, the phenomena of setting narrow goals or narrow mental budgets seem not to reflect choice errors due to low cognitive reflection, but are tools to overcome self-control problems. Buying small scale insurance is associated with having narrow mental budgets - suggesting that people buy such insurance to insure themselves against the consequences of their own self-control strategy.
Original languageEnglish
Place of publicationAarhus
PublisherInstitut for Økonomi, Aarhus Universitet
Number of pages28
Publication statusPublished - 4 Jan 2016
SeriesEconomics Working Papers
Number2016-01

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