A Simple Model of Two-Stage Choice

Sean Horan

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: I provide choice-theoretic foundations for a simple two-stage model, called transitive shortlist methods, where choices are made by sequentially applying a pair of transitive preferences (or rationales) to eliminate inferior alternatives. Despite its simplicity, the model accommodates a wide range of choice phenomena including the status quo bias, framing, homophily, compromise, and limited willpower. I establish that the model can be succinctly characterized in terms of some well-documented context effects in choice. I also show that the underlying rationales are straightforward to determine from readily observable reversals in choice. Finally, I highlight the usefulness of these results in a variety of applications.

Keywords: shortlisting; axiomatization; revealed preference; identification (search for similar items in EconPapers)
JEL-codes: D01 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2016
New Economics Papers: this item is included in nep-mic and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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Journal Article: A simple model of two-stage choice (2016)
Working Paper: A simple model of two-stage choice (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:01-2016

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