Choosing cities: a behavioural economic approach

Banczyk, M, Laban, J and Potts, J 2018, 'Choosing cities: a behavioural economic approach', The Annals of Regional Science, vol. 61, no. 3, pp. 463-477.

Document type: Journal Article
Collection: Journal Articles

Title Choosing cities: a behavioural economic approach
Author(s) Banczyk, M
Laban, J
Potts, J
Year 2018
Journal name The Annals of Regional Science
Volume number 61
Issue number 3
Start page 463
End page 477
Total pages 15
Publisher Springer
Abstract How do people and firms choose to relocate to new cities? We argue that this difficult yet consequential choice is often poorly made, or not made at all, resulting in undermobility and consequent losses in individual utility and aggregate social welfare. We propose a behavioural economic theory of why this happens and the predictable directions in which failure occurs in terms of characteristic biases and heuristics in city choice (including status quo bias, loss aversion, endowment effect, availability heuristics, present bias, social norms, anchoring, elimination heuristics, sunk cost effects, and regret aversion). We examine how cities and their regional context might mitigate this problem by improving information as inputs into choice and by redesigning the choice architecture to embed effective choice heuristics into city search and match databases.
Subject Urban and Regional Economics
DOI - identifier 10.1007/s00168-018-0872-7
Copyright notice © Springer-Verlag GmbH Germany, part of Springer Nature 2018
ISSN 1432-0592
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