Bounded Rationality and Limited Datasets

Geoffroy de Clippel and Kareen Rozen ()

No 1853, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Theories of bounded rationality are typically characterized over an exhaustive data set. How does one tell whether observed choices are consistent with a theory if the data is incomplete" How can out-of-sample predictions be made" What can be identified about preferences" This paper aims to operationalize some leading bounded rationality theories when the available data is limited, as is the case in most practical settings. We also point out that the recent bounded rationality literature has overlooked a methodological pitfall that can lead to 'false positives' and 'empty' out-of-sample predictions when testing choice theories with limited data.

Keywords: Bounded rationality; Limited datasets (search for similar items in EconPapers)
JEL-codes: D01 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2012-03, Revised 2014-05
New Economics Papers: this item is included in nep-cbe, nep-for and nep-upt
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Citations: View citations in EconPapers (17)

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Related works:
Journal Article: Bounded rationality and limited datasets (2021)
Working Paper: Bounded Rationality and Limited Datasets (2020)
Working Paper: Bounded Rationality and Limited Datasets (2012)
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