Bounded Rationality and Limited Datasets

Geoffroy de Clippel and Kareen Rozen

No 2020-08, Working Papers from Brown University, Department of Economics

Abstract: Bounded rationality theories are typically characterized over exhaustive data sets. We develop a methodology to understand the empirical content of such theories with limited data, adapting the classic, revealed-preference approach to new forms of revealed information. We apply our approach to an array of theories, illustrating its versatility. We identify theories and datasets testable in the same elegant way as Rationality, and theories and datasets where testing is more challenging. We show that previous attempts to test consistency of limited data with bounded rationality theories are subject to a conceptual pitfall that can yield false positives and empty out-of-sample predictions.

Date: 2020
New Economics Papers: this item is included in nep-ecm, nep-evo, nep-gth and nep-upt
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Bounded rationality and limited datasets (2021)
Working Paper: Bounded Rationality and Limited Datasets (2014)
Working Paper: Bounded Rationality and Limited Datasets (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:bro:econwp:2020-08

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