A Foundation for Cue-Triggered Behavior

Exposure to environmental cues triggers sudden preference reversals in several choice contexts, including consumption and intertemporal, social, and risky choices. This paper introduces a dual-self model of cue-triggered behavior that (1) is based on a general mechanism that makes it applicable to many choice contexts, (2) allows a sharp comparative analysis of the responsiveness to cues, (3) can explain a wide range of behavioral anomalies, from a cue-triggered present bias to high-frequency variations in social and risk preferences, and (4) can inform the design of managerial interventions and advertising strategies employing environmental cues. Testable restrictions combining choice and nonchoice data fully characterize the model.

This paper was accepted by Manel Baucells, decision analysis.