Inferring Rationales from Choice: Identification for Rational Shortlist Methods

Rohan Dutta and Sean Horan

Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

Abstract: A wide variety of choice behavior inconsistent with preference maximization can be explained by Manzini and Mariotti's Rational Shortlist Methods. Choices are made by sequentially applying a pair of asymmetric binary relations (rationales) to eliminate inferior alternatives. Manzini and Mariotti's axiomatic treatment elegantly describes which behavior can be explained by this model. However, it leaves unanswered what can be inferred, from observed behavior, about the underlying rationales. Establishing this connection is fundamental not only for applied and empirical work but also for meaningful welfare analysis. Our results tightly characterize the surprisingly rich relationship between behavior and the underlying rationales.

Keywords: Revealed Preference; Identification; Uniqueness; Two-stage Choice Procedures; Behavioral Industrial Organization; Comparative Advertising; Decoy Marketing; Welfare. (search for similar items in EconPapers)
JEL-codes: D01 (search for similar items in EconPapers)
Pages: 51 pages
Date: 2013
New Economics Papers: this item is included in nep-dcm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Journal Article: Inferring Rationales from Choice: Identification for Rational Shortlist Methods (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montec:09-2013

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