Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/214315 
Authors: 
Year of Publication: 
2004
Series/Report no.: 
CREMA Working Paper No. 2005-01
Publisher: 
Center for Research in Economics, Management and the Arts (CREMA), Basel
Abstract: 
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.
Subjects: 
Memory
bounded rationality
learning
retention
ironic process theory
principalagency theory
JEL: 
D11
D83
J2
M20
Z00
Document Type: 
Working Paper

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