What Comes to Mind


Gennaioli, Nicola, and Andrei Shleifer. 2010. “What Comes to Mind.” Quarterly Journal of Economics 125 (4): 1399-1433.
Online Appendix125 KB


We present a model of intuitive inference, called “local thinking,” in which an agent combines data received from the external world with information retrieved from memory to evaluate a hypothesis. In this model, selected and limited recall of information follows a version of the representativeness heuristic. The model can account for some of the evidence on judgment biases, including conjunction and dis- junction fallacies, but also for several anomalies related to demand for insurance.

Last updated on 01/30/2013