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Minimal rationalizations

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  • Igor Kopylov

    (University of California, Irvine)

Abstract

I refine the multi-utility model and identify the minimal number W of total orders that is sufficient to rationalize a path independent choice function. This identification invokes the well-known pigeonhole principle: any dataset of size $$W+1$$ W + 1 that is rationalized by W rankings must contain at least two distinct observations where the same ranking is maximized. In general, the index W can be huge even for reasonable choice functions, such as top-ten rules. If W is constrained, then minimal rationalizations can be found in polynomial time via an explicit focal algorithm. The axiom of Expansion (Sen’s $$\gamma $$ γ ) describes a special case where the index W must equal the capacity—the largest number of elements that may be selected together in a menu.

Suggested Citation

  • Igor Kopylov, 2022. "Minimal rationalizations," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 73(4), pages 859-879, June.
  • Handle: RePEc:spr:joecth:v:73:y:2022:i:4:d:10.1007_s00199-021-01345-w
    DOI: 10.1007/s00199-021-01345-w
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    References listed on IDEAS

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    Cited by:

    1. Chambers, Christopher P. & Hayashi, Takashi, 2023. "The structure of representative preference," Journal of Mathematical Economics, Elsevier, vol. 108(C).

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    More about this item

    Keywords

    Multi-utility model; Path independence; Focal algorithm; Heterogeneity; Pigeonhole principle;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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