Date:
Thursday, September 2, 2021, 12:00pm to 1:15pm
Location:
Online
Human beings attempt to rationalize their past choices, even those that were mistakes in hindsight. We propose a formal theory of this behavior. The theory predicts systematic deviations from utility maximization. It yields sunk-cost effects, as well as new ‘unsunk-benefit’ effects. The model primitives are pinned down by choice behavior.