?Just Forget It?: Memory Distortion as Bounded Rationality

Arbeitspapier

Distortions in memory impose important bounds on rationality but have been largely disregarded in economics. While it is possible to learn, it is more difficult, and sometimes impossible, to unlearn. This retention effect lowers individual utility directly or via reduced productivity, and adds costs to principal-agent relationships. The imprinting effect states that the more one tries to forget a piece of information the more vivid it stays in memory, leading to a paradoxical outcome. The effects are based on, and are supported by, psychological experiments, and it is shown that they are relevant in many economic situations and beyond.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CREMA Working Paper ; No. 2005-01

Classification and Topics

• Classification: Wirtschaft ; Consumer Economics: Theory ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Business Economics: General ; Other Special Topics: General
• Subject: Memory ; bounded rationality ; learning ; retention ; ironic process theory ; principalagency theory

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Frey, Bruno S.
• Event: Veröffentlichung
• (who): Center for Research in Economics, Management and the Arts (CREMA)
• (where): Basel
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/214315
• Last update: 10.03.2025, 11:43 AM CET