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Non-rationalizable Individuals, Stochastic Rationalizability, and Sampling

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  • Changkuk Im
  • John Rehbeck

Abstract

Experimental work regularly finds that individual choices are not deterministically rationalized by well-defined preferences. Nonetheless, recent work shows that data collected from many individuals can be stochastically rationalized by a distribution of well-defined preferences. We study the relationship between deterministic and stochastic rationalizability. We show that a population can be stochastically rationalized even when half of the individuals in the population cannot be deterministically rationalized. We also find the ability to detect individuals who are not deterministically rationalized from population level data can decrease as the number of observations increases.

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  • Changkuk Im & John Rehbeck, 2021. "Non-rationalizable Individuals, Stochastic Rationalizability, and Sampling," Papers 2102.03436, arXiv.org, revised Oct 2021.
    • Handle: RePEc:arx:papers:2102.03436
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    References listed on IDEAS

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    Cited by:

    1. Nail Kashaev & Victor H. Aguiar, 2022. "Nonparametric Analysis of Dynamic Random Utility Models," Papers 2204.07220, arXiv.org.

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