Impulsive Actions and Agonizing Decisions

Rather than having precise preferences consistent with a single utility function over commodity bundles, individuals are assumed to have imprecise preferences with a set of possible utility functions, one of which is the true one. When attention is devoted to the task the set of utility functions contracts, making preferences more precise. This increases the individual’s willingness to pay for a good, and when attention is exogenously determined this can lead to impulse shopping. When attention is endogenously determined, more attention is required to choose between bundles that are closer to indi¤erent, making these harder choices. JEL classi…cation: D11, M31 Keywords: Imprecise preferences; incomplete preferences; impulse shopping; consumer choice; satis…cing Department of Economics, University of Tennessee, Knoxville, TN 37996-0550. Email: [email protected]. I am grateful to John Conlon, Scott Gilpatric, Jill Stowe, and participants at the 2007 PET conference for helpful suggestions.