Shortlisting procedure with a limited capacity

Sen Geng and Erkut Ozbay

Journal of Mathematical Economics, 2021, vol. 94, issue C

Abstract: A decision maker, who is overwhelmed by the number of available alternatives, limits her consideration. We investigate a model where a decision maker’s capacity determines whether she is overwhelmed: She considers all the available alternatives if their number does not exceed her capacity; otherwise, she applies a shortlisting procedure to reduce the number of alternatives to within her capacity. We show how to deduce the decision maker’s capacity, her preference and the alternatives that she considers from the observed behavior. Furthermore, we provide the necessary and sufficient conditions for a consideration function to be derived by the shortlisting procedure with a limited capacity.

Keywords: Consideration set; Shortlisting; Limited capacity; Revealed preference (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:94:y:2021:i:c:s0304406820301245

DOI: 10.1016/j.jmateco.2020.11.003

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