On the importance of context in sequential search

Yu-Chin Hsiao, Simon Kemp, Maroš Servátka*

*Corresponding author for this work

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

We experimentally investigate whether framing an individual-choice decision in a market setting results in a different outcome than when the decision is described in a context-free frame. We further explore whether the context effect is triggered solely by the frame or whether a richer descriptive content is required to establish familiarity with the decision-making environment. Understanding what constitutes context is central to formulating practical recommendations aiming to improve the quality of individual decisions. Our results show that framing a sequential search problem as selling houses leads to better decisions than a context-free frame. Manipulating whether or not the framed decision-making scenario includes a description of the house, which would be naturally available in a real estate market, does not impact the length of search or the value of accepted offers.

Original languageEnglish
Pages (from-to)1510-1530
Number of pages21
JournalSouthern Economic Journal
Volume86
Issue number4
Early online date21 Jan 2020
DOIs
Publication statusPublished - 1 Apr 2020

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