A Theory of Ex Post Rationalization
People rationalize their past choices, even those that were mistakes in hindsight. We propose a formal theory of this behavior. The theory predicts that sunk costs affect later choices. Its model primitives are identified by choice behavior and it yields tractable comparative statics.
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| Format: | Artikel |
| Sprache: | eng |
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| Zusammenfassung: | People rationalize their past choices, even those that were mistakes in
hindsight. We propose a formal theory of this behavior. The theory predicts
that sunk costs affect later choices. Its model primitives are identified by
choice behavior and it yields tractable comparative statics. |
|---|---|
| DOI: | 10.48550/arxiv.2107.07491 |