Consumer theory with bounded rational preferences

Georgios Gerasimou

MPRA Paper from University Library of Munich, Germany

Abstract: The neoclassical consumer maximizes utility and makes choices by completely preordering the feasible alternatives and weighing when indifferent. The consumer studied in this paper chooses by weighing when indifferent and also when indecisive, without necessarily preordering the alternatives or exhausting her budget. Preferences therefore need not be complete, transitive or non-satiated but are assumed strictly convex and "adaptive". The latter axiom is new and parallels that of ambiguity aversion in choice under uncertainty.

Keywords: preferences: incomplete, intransitive, convex, adaptive; representation; demand. (search for similar items in EconPapers)
JEL-codes: D01 D03 D11 (search for similar items in EconPapers)
Date: 2009-01-28, Revised 2009-11-16
New Economics Papers: this item is included in nep-cbe, nep-evo and nep-upt
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Related works:
Journal Article: Consumer theory with bounded rational preferences (2010)
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