Categorize then choose: boundedly rational choice and welfare

Manzini, Paola and Mariotti, Marco (2012) Categorize then choose: boundedly rational choice and welfare. Journal of the European Economic Association, 10 (5). pp. 1141-1165. ISSN 1542-4766

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Abstract

We propose a boundedly rational model of choice where agents categorize alternatives before choosing. The model explains some behavioral anomalies, and it is fully characterized by a property of choice data: a categorizer can never exhibit certain patterns of “revealed preference reversals”. This model offers clues on the problem of making welfare judgements in the presence of boundedly rational agents.

Item Type: Article
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HB Economic theory. Demography > HB0071 Economics as a science. Relation to other subjects
H Social Sciences > HB Economic theory. Demography > HB0131 Methodology > HB0135 Mathematical economics. Quantitative methods Including econometrics, input-output analysis, game theory
H Social Sciences > HB Economic theory. Demography > HB0846 Welfare theory
Depositing User: Professor Paola Manzini
Date Deposited: 07 Nov 2017 12:21
Last Modified: 07 Nov 2017 12:22
URI: http://sro.sussex.ac.uk/id/eprint/70999

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