Speed, Accuracy, and the Optimal Timing of Choices
- (pp. 3651-84)
AbstractWe model the joint distribution of choice probabilities and decision times in binary decisions as the solution to a problem of optimal sequential sampling, where the agent is uncertain of the utility of each action and pays a constant cost per unit time for gathering information. We show that choices are more likely to be correct when the agent chooses to decide quickly provided that the agent's prior beliefs are correct. This better matches the observed correlation between decision time and choice probability than does the classical drift-diffusion model (DDM), where the agent knows the utility difference between the choices.
CitationFudenberg, Drew, Philipp Strack, and Tomasz Strzalecki. 2018. "Speed, Accuracy, and the Optimal Timing of Choices." American Economic Review, 108 (12): 3651-84. DOI: 10.1257/aer.20150742
- C41 Duration Analysis; Optimal Timing Strategies
- D11 Consumer Economics: Theory
- D12 Consumer Economics: Empirical Analysis
- D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness