Satisficing and stochastic choice
Victor Aguiar (),
Maria Jose Boccardi Chalela () and
Mark Dean ()
Journal of Economic Theory, 2016, vol. 166, issue C, 445-482
Satisficing is a hugely influential model of boundedly rational choice, yet it cannot be easily tested using standard choice data. We develop necessary and sufficient conditions for stochastic choice data to be consistent with satisficing, assuming that preferences are fixed, but search order may change randomly. The model predicts that stochastic choice can only occur amongst elements that are always chosen, while all other choices must be consistent with standard utility maximization. Adding the assumption that the probability distribution over search orders is the same for all choice sets makes the satisficing model a subset of the class of random utility models.
Keywords: Satisficing; Stochastic choice; Bounded rationality; Search; Random utility (search for similar items in EconPapers)
JEL-codes: D03 D11 D83 (search for similar items in EconPapers)
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Working Paper: Satisficing and Stochastic Choice (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:166:y:2016:i:c:p:445-482
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