Characterizing Behavioral Decisions with Choice Data

Sayantan Ghosal and Patricio Dalton (p.s.dalton@tilburguniversity.edu)

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: This paper provides an axiomatic characterization of choices in a setting where a decision-maker may not fully internalize all the consequences of her choices on herself. Such a departure from rationality, it turns out, is common across a variety of positive behavioral models and admits the standard rational choice model as a special case. We show that choice data satisfying (a) Sen’s axioms and fully characterize behavioral decisions, and (b) Sen’s axiom and fully characterize standard decision-making. In addition, we show that (a) it is possible to identify a minimal and a maximal set of psychological states using choice data alone, and (b) under specific choice scenarios, "revealed mistakes" can be inferred directly from choice data.

Keywords: Behavioral Decisions; Revealed and Normative Preferences; Welfare; Axiomatic characterization (search for similar items in EconPapers)
Date: 2013
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http://www2.warwick.ac.uk/fac/soc/economics/resear ... /107.2013_ghosal.pdf

Related works:
Working Paper: Characterizing Behavioral Decisions with Choice Datas (2013)
Working Paper: Characterizing behavioral decisions with choice data (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:107

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