This research investigates an understudied decision heuristic, the majority rule. By using the rule, decision makers choose the option superior on most of the available cues. Cues are broadly defined, including advisors and attributes. We propose that decision makers are more likely to use the...

Recent years have witnessed a growing interest among psychologists and other social scientists in subjective wellbeing and happiness. Here we review selected contributions to this development from the literature on behavioral decision theory. In particular, we examine many, somewhat surprising,...

The purpose of this chapter is to discuss how regulatory focus theory, a theory of motivation and self-regulation, can be drawn upon to explain a variety of consumer decision making phenomena. We briefly review the major tenets of the theory, which proposes a fundamental distinction between two...

How do rational firms respond to consumer biases? In this paper, we analyze the profit-maximizing contract design of firms if consumers have time-inconsistent preferences and are partially naive about it. We consider markets for two types of goods: goods with immediate costs and delayed benefits...

In this paper, a formal test of intra-household commitment is derived and performed. To that end, two models of household intertemporal behavior are developed. In both models, household members are characterized by individual preferences. In the first formulation, household decisions are always...

In this paper, the traditional household Euler equations are estimated for singles and separately for couples. Using the CEX and the PSID, I reject the Euler equations of couples, but I cannot reject the Euler equations of singles. To rationalize this result, I develop an intertemporal model...

In this paper it is shown that the intratemporal and intertemporal preferences of each decision maker in the household can be identified even if individual consumption is not observed. This identification result is used jointly with the Consumer Expenditure Survey (CEX) to estimate the...

Prior studies find a strong negative relation between smoking and body mass index (BMI). Smoking and obesity both imply a preference for utility in the present at the expense of future consumption. This study proxies time preference through a composite index of equally-weighted intertemporal...

Brand names and other brand elements are often displayed on one’s body or clothes for the purpose of personal value expression. Despite the frequency of such brand displays in the marketplace, we know little about how consumers respond to seeing brands in this fashion. A recent view of...

Some countries have the resources and capacity to save more than the other countries. This paper analyses the determinants of annual saving. The analysis uses the optimal saving function which is derived from the household inter-temporal utility maximisation. The predictions from the comparative...