Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods

Paola Manzini and Marco Mariotti

No 1239, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: A sequentially rationalizable choice function is a choice function which can be obtained by applying sequentially a fixed set of asymmetric binary relations (rationales). A Rational ShortlistMethod (RSM) is a choice function which is sequentially rationalizable by two rationales. These concepts translate into economic language some human choice heuristics studied in psychology. We provide a full characterization of RSMs and study some properties of sequential rationalizability. These properties allow some degree of menu dependence in choice.

Keywords: incomplete preferences; intransitive choice; bounded rationality; menu dependence; rationalizability of choice (search for similar items in EconPapers)
JEL-codes: D0 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2004-08
New Economics Papers: this item is included in nep-cbe, nep-dcm and nep-evo
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published - published as "Sequentially Rationalizable Choice" in: American Economic Review, 2007, 97 (5), 1824-1839

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