Essays on Preference Formation

Abstract

This dissertation centers on cognitive factors like attention, complexity, motivation, and memory, and their role in explaining individual decision-making processes. The study aims to contribute to this literature by examining how the decision environment influences choices in three different contexts. In Chapter 1, the focus is on the preference individuals show for active engagement, even when passive options maximize material gains. This "active participation bias" is explored alongside its potential consequences. Chapter 2 presents a model illustrating how voters' salience bias can lead to extreme policies despite moderate preferences, supported by survey evidence. Chapter 3 conducts experiments highlighting "attribution bias," where individuals struggle to differentiate between consumption state and good quality when the state isn't easily observable, explaining its mechanism and potential solutions.