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Beyond Classical Rationality: Two-Stage Rationalization

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  • Danilov, V.

    (The Central Economic Mathematical Institute RAS, Moscow, Russia)

Abstract

Numerous facts indicate that behaviour (choice) of economic agents does not satisfy strong criterions of rationality. One of the possible explanation is in that the choice goes in two (or more) sequential stages. In the first stage, one chooses a subset F(A) from an initial menu A. Then the best element (with respert to some linear order) is chosen from F(A) . The resulting choice is not rational in the classical sense. However it possesses some specific properties which distinguish it from arbitrary non-rational behaviour. In the paper we give a survey of recent works on two-stage choice. Axiomatic characteristics of such a choice are given depending on rationality conditions of the first step choice.

Suggested Citation

  • Danilov, V., 2015. "Beyond Classical Rationality: Two-Stage Rationalization," Journal of the New Economic Association, New Economic Association, vol. 26(2), pages 12-35.
    • Handle: RePEc:nea:journl:y:2015:i:26:p:12-35
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    References listed on IDEAS

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    1. Karpov, Aleksandr, 2017. "Price competition and limited attention," Economics Discussion Papers 2017-89, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    choice function; axioms of heredity; outcast; and concordance; filter; preferences; axiom of revealed preference; Plott function;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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