Simple Models for Multiattribute Choice with Many Alternatives: When It Does and Does Not Pay to Face Trade-offs with Binary Attributes
AbstractGiven the difficulties people experience in making trade-offs, what are the consequences of using simple models that avoid trade-offs? We examine choices by such models in environments where "true" preferences are linear and attributes are characterized by binary attributes. A deterministic elimination-by-aspects (DEBA) model is highly effective over a range of conditions. When preferences are quite compensatory, however, a modified equal weighting (EW) model that uses DEBA to resolve ties is more effective. We explore the sensitivity of results to errors in using DEBA, to different distributions of alternatives, and to error in "true" preferences. Under the conditions examined here, the outcomes of these "boundedly rational" models are highly consistent with "rational" models that explicitly confront trade-offs. We emphasize the importance of binary attributes in reaching these conclusions.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by INFORMS in its journal Management Science.
Volume (Year): 51 (2005)
Issue (Month): 12 (December)
decision making; bounded rationality; lexicographic rules; choice theory;
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Nathan Berg & G. Biele & Gerd Gigerenzer, 2013.
"Does Consistency Predict Accuracy of Beliefs?: Economists Surveyed About PSA,"
1308, University of Otago, Department of Economics, revised Apr 2013.
- Berg, Nathan & Biele, Guido & Gigerenzer, Gerd, 2010. "Does consistency predict accuracy of beliefs?: Economists surveyed about PSA," MPRA Paper 26590, University Library of Munich, Germany.
- Berg, Nathan & Biele, Guido & Gigerenzer, Gerd, 2010. "Does Consistency Predict Accuracy of Beliefs?: Economists Surveyed About PSA," MPRA Paper 24976, University Library of Munich, Germany.
- Jose Apesteguia & Miguel Angel Ballester, 2012.
"Choice By Sequential Procedures,"
615, Barcelona Graduate School of Economics.
- Jose Apesteguia & Miguel A. Ballester, 2012. "Choice by sequential procedures," Economics Working Papers 1309, Department of Economics and Business, Universitat Pompeu Fabra.
- Jose Apesteguia & Miguel Ballester, 2009. "Choice by Sequential Procedures," NajEcon Working Paper Reviews 814577000000000404, www.najecon.org.
- Beccacece, F. & Borgonovo, E., 2011. "Functional ANOVA, ultramodularity and monotonicity: Applications in multiattribute utility theory," European Journal of Operational Research, Elsevier, vol. 210(2), pages 326-335, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc).
If references are entirely missing, you can add them using this form.