On the observable restrictions of limited consideration models: theory and application

Yuta Inoue () and Koji Shirai ()
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Yuta Inoue: Waseda University, 1-6-1, Nishi-Waseda, Shinjuku-ku
Koji Shirai: Kwansei Gakuin University, 1-155, Uegahara Ichiban-cho

Economic Theory, 2023, vol. 75, issue 3, No 3, 695-715

Abstract: Abstract This paper develops a revealed preference analysis for limited consideration models. A revealed preference test is given for the decision model obeying two well-established hypotheses on a decision maker’s consideration: the attention filter property and competition filter property. We also provide a test for the two-step decision model called the (transitive) rational shortlist method. We conduct simulations to compare the relative strength of observable restrictions across leading models, where we find drastic differences in Bronars’ indices of models.

Keywords: Revealed preference; Limited consideration; Limited attention; Rational shortlisting; Bronars’ test (search for similar items in EconPapers)
JEL-codes: D11 D91 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s00199-022-01418-4

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