IDEAS home Printed from https://ideas.repec.org/a/eee/mateco/v87y2020icp67-76.html
   My bibliography  Save this article

Satisficing with a variable threshold

Author

Listed:
  • Kovach, Matthew
  • Ülkü, Levent

Abstract

We axiomatize a model of satisficing which features random thresholds and the possibility of choice abstention. Given a menu, the decision maker first randomly draws a threshold. Next, using a list order, she searches the menu for alternatives which are at least as good as the threshold. She chooses the first such alternative she finds, and if no such alternative exists, she abstains. Since the threshold is random, so is the resulting behavior. We characterize this model using two simple axioms. In general the revelation of the model’s primitives is incomplete. We characterize a specialization of the model for which the underlying preference and list ordering are uniquely identified by choice frequencies. We also show that our model is a special Random Utility Model.

Suggested Citation

  • Kovach, Matthew & Ülkü, Levent, 2020. "Satisficing with a variable threshold," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 67-76.
    • Handle: RePEc:eee:mateco:v:87:y:2020:i:c:p:67-76
    DOI: 10.1016/j.jmateco.2019.12.005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0304406820300033
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jmateco.2019.12.005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Simonson, Itamar, 1989. "Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 16(2), pages 158-174, September.
    2. Jörg Rieskamp & Jerome R. Busemeyer & Barbara A. Mellers, 2006. "Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 631-661, September.
    3. Aguiar, Victor H. & Boccardi, Maria Jose & Dean, Mark, 2016. "Satisficing and stochastic choice," Journal of Economic Theory, Elsevier, vol. 166(C), pages 445-482.
    4. Paola Manzini & Marco Mariotti, 2014. "Stochastic Choice and Consideration Sets," Econometrica, Econometric Society, vol. 82(3), pages 1153-1176, May.
    5. Tyson, Christopher J., 2008. "Cognitive constraints, contraction consistency, and the satisficing criterion," Journal of Economic Theory, Elsevier, vol. 138(1), pages 51-70, January.
    6. Georgios Gerasimou, 2018. "Indecisiveness, Undesirability and Overload Revealed Through Rational Choice Deferral," Economic Journal, Royal Economic Society, vol. 128(614), pages 2450-2479, September.
    7. Masatlioglu, Yusufcan & Ok, Efe A., 2005. "Rational choice with status quo bias," Journal of Economic Theory, Elsevier, vol. 121(1), pages 1-29, March.
    8. Herbert A. Simon, 1955. "A Behavioral Model of Rational Choice," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 69(1), pages 99-118.
    9. Aguiar, Victor H. & Kimya, Mert, 2019. "Adaptive stochastic search," Journal of Mathematical Economics, Elsevier, vol. 81(C), pages 74-83.
    10. Andrew Caplin & Mark Dean & Daniel Martin, 2011. "Search and Satisficing," American Economic Review, American Economic Association, vol. 101(7), pages 2899-2922, December.
    11. Richard L. Brady & John Rehbeck, 2016. "Menu‐Dependent Stochastic Feasibility," Econometrica, Econometric Society, vol. 84, pages 1203-1223, May.
    12. Tyson, Christopher J., 2008. "Cognitive constraints, contraction consistency, and the satisficing criterion," Journal of Economic Theory, Elsevier, vol. 138(1), pages 51-70, January.
    13. Chambers,Christopher P. & Echenique,Federico, 2016. "Revealed Preference Theory," Cambridge Books, Cambridge University Press, number 9781107087804.
    14. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, vol. 69(6), pages 1403-1435, November.
    15. Aguiar, Victor H., 2017. "Random categorization and bounded rationality," Economics Letters, Elsevier, vol. 159(C), pages 46-52.
    16. Paola Manzini & Marco Mariotti, 2007. "Sequentially Rationalizable Choice," American Economic Review, American Economic Association, vol. 97(5), pages 1824-1839, December.
    17. , & ,, 2006. "A model of choice from lists," Theoretical Economics, Econometric Society, vol. 1(1), pages 3-17, March.
    18. Papi, Mauro, 2012. "Satisficing choice procedures," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 451-462.
    19. Gent Bajraj & Levent Ülkü, 2015. "Choosing two finalists and the winner," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(4), pages 729-744, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Victor H. Aguiar & Maria Jose Boccardi & Nail Kashaev & Jeongbin Kim, 2023. "Random utility and limited consideration," Quantitative Economics, Econometric Society, vol. 14(1), pages 71-116, January.
    2. Bhavook Bhardwaj & Siddharth Chatterjee, 2022. "Decisions over Sequences," Papers 2203.00070, arXiv.org, revised Sep 2022.
    3. Aguiar, Victor H. & Kimya, Mert, 2019. "Adaptive stochastic search," Journal of Mathematical Economics, Elsevier, vol. 81(C), pages 74-83.
    4. Gilberto Tadeu Lima & Mark Setterfield & Jaylson Jair da Silveira, 2023. "Achieving two policy targets with one policy instrument: heterogeneous expectations, countercyclical fiscal policy, and macroeconomic stabilization at the effective lower bound," Working Papers 2301, New School for Social Research, Department of Economics.
    5. Kovach, Matthew & Suleymanov, Elchin, 2023. "Reference dependence and random attention," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 421-441.
    6. Wang, Kai, 2022. "Approval with frames," Journal of Mathematical Economics, Elsevier, vol. 103(C).
    7. Kashaev, Nail & Aguiar, Victor H., 2022. "A random attention and utility model," Journal of Economic Theory, Elsevier, vol. 204(C).
    8. Yegane, Ece, 2022. "Stochastic choice with limited memory," Journal of Economic Theory, Elsevier, vol. 205(C).
    9. Ishii, Yuhta & Kovach, Matthew & Ülkü, Levent, 2021. "A model of stochastic choice from lists," Journal of Mathematical Economics, Elsevier, vol. 96(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aguiar, Victor H. & Kimya, Mert, 2019. "Adaptive stochastic search," Journal of Mathematical Economics, Elsevier, vol. 81(C), pages 74-83.
    2. Kashaev, Nail & Aguiar, Victor H., 2022. "A random attention and utility model," Journal of Economic Theory, Elsevier, vol. 204(C).
    3. Bleile, Jörg, 2016. "Limited Attention in Case-Based Belief Formation," Center for Mathematical Economics Working Papers 518, Center for Mathematical Economics, Bielefeld University.
    4. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2016. "Partial knowledge restrictions on the two-stage threshold model of choice," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 41-47.
    5. Demirkan, Yusufcan & Kimya, Mert, 2020. "Hazard rate, stochastic choice and consideration sets," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 142-150.
    6. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2016. "Partial knowledge restrictions on the two-stage threshold model of choice," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 41-47.
    7. González-Valdés, Felipe & Ortúzar, Juan de Dios, 2018. "The Stochastic Satisficing model: A bounded rationality discrete choice model," Journal of choice modelling, Elsevier, vol. 27(C), pages 74-87.
    8. Papi, Mauro, 2012. "Satisficing choice procedures," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 451-462.
    9. Valentino Dardanoni & Paola Manzini & Marco Mariotti & Christopher J. Tyson, 2020. "Inferring Cognitive Heterogeneity From Aggregate Choices," Econometrica, Econometric Society, vol. 88(3), pages 1269-1296, May.
    10. Christopher Tyson, 2015. "Satisficing behavior with a secondary criterion," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 639-661, March.
    11. Papi, Mauro, 2013. "Satisficing and maximizing consumers in a monopolistic screening model," Mathematical Social Sciences, Elsevier, vol. 66(3), pages 385-389.
    12. Nishimura, Hiroki, 2018. "The transitive core: inference of welfare from nontransitive preference relations," Theoretical Economics, Econometric Society, vol. 13(2), May.
    13. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J, 2015. "Partial Knowledge Restrictions on theTwo-Stage Threshold Model of Choice," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-58, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2011. "Manipulation of Choice Behavior," IZA Discussion Papers 5891, Institute of Labor Economics (IZA).
    15. Duffy, Sean & Gussman, Steven & Smith, John, 2019. "Judgments of length in the economics laboratory: Are there brains in choice?," MPRA Paper 93126, University Library of Munich, Germany.
    16. Duffy, Sean & Smith, John, 2020. "An economist and a psychologist form a line: What can imperfect perception of length tell us about stochastic choice?," MPRA Paper 99417, University Library of Munich, Germany.
    17. Salvador Barberà & Alejandro Neme, 2015. "Ordinal Relative Satisficing Behavior: Theory and Experiments," Working Papers 790, Barcelona School of Economics.
    18. Kops, Christopher, 2022. "Cluster-shortlisted choice," Journal of Mathematical Economics, Elsevier, vol. 102(C).
    19. Duffy, Sean & Gussman, Steven & Smith, John, 2021. "Visual judgments of length in the economics laboratory: Are there brains in stochastic choice?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 93(C).
    20. Christopher Tyson, 2015. "Satisficing behavior with a secondary criterion," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 639-661, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:mateco:v:87:y:2020:i:c:p:67-76. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jmateco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.