Advanced Search
MyIDEAS: Login to save this paper or follow this series

Reason-Based Choice: A Bargaining Rationale for the Attraction and Compromise Effects

Contents:

Author Info

Abstract

Among the most important and robust violations of rationality are the attraction and the compromise effects. The compromise effect refers to the tendency of individuals to choose an intermediate option in a choice set, while the attraction effect refers to the tendency to choose an option that dominates some other options in the choice set. This paper argues that both effects may result from an individual’s attempt to overcome the difficulty of making a choice in the absence of a single criterion for ranking the options. Moreover, we propose to view the resolution of this choice problem as a cooperative solution to an intra-personal bargaining problem among different selves of an individual, where each self represents a different criterion for choosing. We first identify a set of properties that characterize those choice correspondences that coincide with our bargaining solution, for some pair of preference relations. Second, we provide a revealed-preference foundation to our bargaining solution and characterize the extent to which these two preference relations can be uniquely identified. Alternatively, our analysis may be reinterpreted as a study of (inter-personal) bilateral bargaining over a finite set of options. In that case, our results provide a new characterization, as well as testable implications, of an ordinal bargaining solution that has been previously discussed in the literature under the various names of fallback bargaining, unanimity compromise, Rawlsian arbitration rule and Kant- Rawls social compromise.

Download Info

If 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.
File URL: http://www.brown.edu/Departments/Economics/Papers/2009/2009-4_paper.pdf
Download Restriction: no

Bibliographic Info

Paper provided by Brown University, Department of Economics in its series Working Papers with number 2009-4.

as in new window
Length:
Date of creation: 2009
Date of revision:
Handle: RePEc:bro:econwp:2009-4

Contact details of provider:
Postal: Department of Economics, Brown University, Providence, RI 02912

Related research

Keywords:

Other versions of this item:

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Attila Ambrus & Kareen Rozen, 2008. "Rationalizing Choice with Multi-Self Models," Cowles Foundation Discussion Papers, Cowles Foundation for Research in Economics, Yale University 1670, Cowles Foundation for Research in Economics, Yale University, revised May 2012.
  2. Nejat Anbarci, 2005. "Finite Alternating-Move Arbitration Schemes and the Equal Area Solution," Working Papers, Florida International University, Department of Economics 0518, Florida International University, Department of Economics.
  3. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Ozbay, 2009. "Revealed Attention," NajEcon Working Paper Reviews, www.najecon.org 814577000000000409, www.najecon.org.
  4. Michele Lombardi, 2007. "Reason-Based Choice Correspondences," Working Papers, Queen Mary, University of London, School of Economics and Finance 607, Queen Mary, University of London, School of Economics and Finance.
  5. Eliaz, Kfir & Spiegler, Ran, 2004. "Contracting with Diversely Naive Agents," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4573, C.E.P.R. Discussion Papers.
  6. Gil Kalai & Ariel Rubinstein & Ran Spiegler, 2002. "Rationalizing Choice Functions By Multiple Rationales," Econometrica, Econometric Society, Econometric Society, vol. 70(6), pages 2481-2488, November.
  7. Pierre-André Chiappori & Olivier Donni, 2006. "Learning from a Piece of Pie: the Empirical Content of Nash Bargaining," Cahiers de recherche, CIRPEE 0619, CIRPEE.
  8. repec:bla:restud:v:73:y:2006:i:3:p:689-714 is not listed on IDEAS
  9. Kfir Eliaz & Michael Richter & Ariel Rubinstein, 2011. "Choosing the two finalists," Economic Theory, Springer, Springer, vol. 46(2), pages 211-219, February.
  10. Anbarci, Nejat, 1993. "Noncooperative Foundations of the Area Monotonic Solutions," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 108(1), pages 245-58, February.
  11. Green, Jerry & Hojman, Daniel, 2007. "Choice, Rationality and Welfare Measurement," Working Paper Series, Harvard University, John F. Kennedy School of Government rwp07-054, Harvard University, John F. Kennedy School of Government.
  12. Özgür Kıbrıs & Murat Sertel, 2007. "Bargaining over a finite set of alternatives," Social Choice and Welfare, Springer, Springer, vol. 28(3), pages 421-437, April.
  13. Chambers, Christopher P. & Echenique, Federico, 2008. "The core matchings of markets with transfers," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 1298, California Institute of Technology, Division of the Humanities and Social Sciences.
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 in new window

Cited by:
  1. Jose Apesteguia & Miguel Angel Ballester, 2012. "Choice By Sequential Procedures," Working Papers 615, Barcelona Graduate School of Economics.
  2. Geoffroy de Clippel, 2009. "Axiomatic Bargaining on Economic Enviornments with Lott," Working Papers, Brown University, Department of Economics 2009-5, Brown University, Department of Economics.
  3. Heller, Yuval, 2009. "Justifiable choice," MPRA Paper 15645, University Library of Munich, Germany.
  4. Attila Ambrus & Kareen Rozen, 2012. "Rationalizing Choice with Multi-Self Models," Levine's Working Paper Archive 786969000000000512, David K. Levine.
  5. Georgios, Gerasimou, 2013. "A Behavioural Model of Choice in the Presence of Decision Conflict," SIRE Discussion Papers, Scottish Institute for Research in Economics (SIRE) 2013-25, Scottish Institute for Research in Economics (SIRE).
  6. Echenique, Federico & Chambers, Christopher P., 2014. "On the consistency of data with bargaining theories," Theoretical Economics, Econometric Society, Econometric Society, vol. 9(1), January.
  7. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Ozbay, 2009. "Revealed Attention," NajEcon Working Paper Reviews, www.najecon.org 814577000000000409, www.najecon.org.
  8. Geoffroy de Clippel, 2012. "Behavioral Implementation," Working Papers, Brown University, Department of Economics 2012-6, Brown University, Department of Economics.
  9. Gerasimou, Georgios, 2012. "Asymmetric Dominance, Deferral and Status Quo Bias in a Theory of Choice with Incomplete Preferences," MPRA Paper 40097, University Library of Munich, Germany.
  10. Geoffroy de Clippel & Camelia Bejan, 2009. "No Profitable Decomposition in Quasi-Linear Allocation Problems," Working Papers, Brown University, Department of Economics 2009-6, Brown University, Department of Economics.
  11. Sandroni, Alvaro & Cherepavov, Vadim & Feddersen, Timothy, 2013. "Rationalization," Theoretical Economics, Econometric Society, Econometric Society, vol. 8(3), September.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bro:econwp:2009-4. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brown Economics Webmaster).

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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