text-only page produced automatically by LIFT Text
Transcoder Skip all navigation and go to page contentSkip top navigation and go to directorate navigationSkip top navigation and go to page navigation
National Science Foundation HomeNational Science Foundation - Directorate for Social, Behavioral & Economic Sciences (SBE)
Social, Behavioral & Economic Sciences
design element
SBE Home
About SBE
Funding Opportunities
Awards
News
Events
Discoveries
Publications
Advisory Committee
Career Opportunities
See Additional SBE Resources
View SBE Staff
SBE Organizations
SBE Office of Multidisciplinary Activities (SMA )
National Center for Science and Engineering Statistics (NCSE)
Division of Behavioral and Cognitive Sciences (BCS )
Division of Social and Economic Sciences (SES )
Proposals and Awards
Proposal and Award Policies and Procedures Guide
  Introduction
Proposal Preparation and Submission
bullet Grant Proposal Guide
  bullet Grants.gov Application Guide
Award and Administration
bullet Award and Administration Guide
Award Conditions
Other Types of Proposals
Merit Review
NSF Outreach
Policy Office Website
Additional SBE Resources
Exploring What Makes Us Human
Rebuilding the Mosaic Report
Bringing People Into Focus: How Social, Behavioral & Economic Research Addresses National Challenges
"Youth Violence: What We Need to Know" Report to NSF
Social, Behavioral and Economic Research in the Federal Context Report
Expedited Review of Social and Behavioral Research Activities Report
SBE Advisory Committee Web Site (for members only)


SBE 2020: Submission Detail

ID Number: 27
Title: Grand Challenges in Economics: What is the Right Amount of Choice?
Lead Author: Gruber, Jonathan
Abstract: A fundamental tenet of neoclassical economics is that more choice is good. More choices expand the possibilities set and can only lead to individuals finding outcomes that they prefer. Many econometric models of choice, such as the standard logit choice model, by definition have error structures that show an increase in welfare as choices increase. Yet what has been apparent to lay-people for many years has become clear to economists as well in recent years: too much choice can reduce welfare. A wide variety of papers in behavioral economics has shown how increasing the size of choice sets can reduce participation in the market. Other papers have shown consumers choosing clearly dominated options in choice environments, particularly the elderly who may face cognitive challenges in making appropriate choices. For example, in recent work with Jason Abaluck, I have found clear evidence that the substantial majority elders choosing prescription drug plans under the Medicare Part D plan do not choose the cost minimizing option. This existing literature suffers, however, from the standard problem with empirical work in behavioral economics: it clearly documents a positive anomaly, but leaves us with little normative guidance as to the policy implications. This research suggests that in a variety of contexts we may want to limit choice  but how much? And, if choice is to be limited, should it be limited through simply reducing the number of options, or by restricting the space set in which suppliers can compete to provide a more organized choice framework?
PDF: Gruber_Jonathan_27.pdf

SBE 2020 Home

 

Print this page
Back to Top of page