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

The Foundations of Imperfect Decision Making

Contents:

Author Info

  • Tyson, Chris

    (Stanford U)

Registered author(s):

    Abstract

    A theory of decision-making is proposed that speaks to Herbert Simon's methodological critique of economics without resorting to excessive reductionism. Formally, the new theory removes the Contraction axiom of conventional choice theory (which is itself reviewed in detail). In its interpretation, the theory reflects a conceit that decision makers may not fully perceive their preferences among alternatives, with perceived preference being assumed to possess different sets of properties. A utility-based representation of the postulated behavior is obtained, and is seen to be reminiscent of Simon's notion of "satisficing."

    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://gsbapps.stanford.edu/researchpapers/library/RP1714.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1714.

    as in new window
    Length:
    Date of creation: Nov 2001
    Date of revision:
    Handle: RePEc:ecl:stabus:1714

    Contact details of provider:
    Postal: Stanford University, Stanford, CA 94305-5015
    Phone: (650) 723-2146
    Fax: (650)725-6750
    Email:
    Web page: http://gsbapps.stanford.edu/researchpapers/
    More information through EDIRC

    Related research

    Keywords:

    Other versions of this item:

    Find related papers by JEL classification:

    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. Simon, Herbert A, 1986. "Rationality in Psychology and Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages S209-24, October.
    2. Gil Kalai & Ariel Rubinstein & Ran Spiegler, 2001. "Rationalizing Choice Functions by Multiple Rationales," Discussion Paper Series, The Center for the Study of Rationality, Hebrew University, Jerusalem dp278, The Center for the Study of Rationality, Hebrew University, Jerusalem.
    3. Paola Manzini & Marco Mariotti, 2004. "Rationalizing Boundedly Rational Choice," Microeconomics, EconWPA 0407005, EconWPA, revised 21 Jul 2005.
    4. Baigent, Nick & Gaertner, Wulf, 1996. "Never Choose the Uniquely Largest: A Characterization," Economic Theory, Springer, Springer, vol. 8(2), pages 239-49, August.
    5. Machina,Mark & Schmeidler,David, 1991. "A more robust definition of subjective probability," Discussion Paper Serie A 365, University of Bonn, Germany.
    6. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, American Economic Association, vol. 69(4), pages 493-513, September.
    7. Eytan Sheshinski, 2000. "Bounded Rationality and Socially Optimal Limits on Choice in a Self-Selection Model," Discussion Paper Series, The Center for the Study of Rationality, Hebrew University, Jerusalem dp330, The Center for the Study of Rationality, Hebrew University, Jerusalem, revised Nov 2002.
    8. Amartya Sen, 1996. "Maximization and the Act of Choice," Harvard Institute of Economic Research Working Papers 1766, Harvard - Institute of Economic Research.
    9. Sen, Amartya K, 1969. "Quasi-Transitivity, Rational Choice and Collective Decisions," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 36(107), pages 381-93, July.
    10. Aumann, Robert J, 1987. "Correlated Equilibrium as an Expression of Bayesian Rationality," Econometrica, Econometric Society, Econometric Society, vol. 55(1), pages 1-18, January.
    11. Mirrlees, James A., 1987. "Economic Policy and Nonrational Behavior," Department of Economics, Working Paper Series, Department of Economics, Institute for Business and Economic Research, UC Berkeley qt9tw447ws, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    12. José Apesteguía & Miguel A. Ballester, 2005. "Minimal Books Of Rationales," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra, Departamento de Economía - Universidad Pública de Navarra 0501, Departamento de Economía - Universidad Pública de Navarra.
    13. Sen, Amartya, 1993. "Internal Consistency of Choice," Econometrica, Econometric Society, Econometric Society, vol. 61(3), pages 495-521, May.
    14. Wulf Gaertner & Yongsheng Xu, 1999. "On rationalizability of choice functions: A characterization of the median," Social Choice and Welfare, Springer, Springer, vol. 16(4), pages 629-638.
    15. Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, London School of Economics and Political Science, vol. 40(159), pages 241-59, August.
    16. Anand, Paul, 1993. "The Philosophy of Intransitive Preference," Economic Journal, Royal Economic Society, Royal Economic Society, vol. 103(417), pages 337-46, March.
    17. Sen, Amartya K, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 38(115), pages 307-17, July.
    18. Faruk Gul & Wolfgang Pesendorfer, 2001. "Temptation and Self-Control," Econometrica, Econometric Society, Econometric Society, vol. 69(6), pages 1403-1435, November.
    19. Gilboa, Itzhak & Schmeidler, David, 1989. "Maxmin expected utility with non-unique prior," Journal of Mathematical Economics, Elsevier, vol. 18(2), pages 141-153, April.
    20. Bordes, Georges, 1976. "Consistency, Rationality and Collective Choice," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 43(3), pages 451-57, October.
    21. Simon, Herbert A, 1978. "Rationality as Process and as Product of Thought," American Economic Review, American Economic Association, American Economic Association, vol. 68(2), pages 1-16, May.
    22. Johnson, Mark R. & Dean, Richard A., 2001. "Locally complete path independent choice functions and their lattices," Mathematical Social Sciences, Elsevier, Elsevier, vol. 42(1), pages 53-87, July.
    23. Schmeidler, David, 1989. "Subjective Probability and Expected Utility without Additivity," Econometrica, Econometric Society, Econometric Society, vol. 57(3), pages 571-87, May.
    24. Sen, Amartya K, 1977. "Social Choice Theory: A Re-examination," Econometrica, Econometric Society, Econometric Society, vol. 45(1), pages 53-89, January.
    25. Nash, John, 1950. "The Bargaining Problem," Econometrica, Econometric Society, Econometric Society, vol. 18(2), pages 155-162, April.
    26. John Conlisk, 1996. "Why Bounded Rationality?," Journal of Economic Literature, American Economic Association, vol. 34(2), pages 669-700, June.
    27. Herzberger, Hans G, 1973. "Ordinal Preference and Rational Choice," Econometrica, Econometric Society, Econometric Society, vol. 41(2), pages 187-237, March.
    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. Georgios Gerasimou, 2013. "A Behavioural Model of Choice in the Presence of Decision Conflict," Discussion Paper Series, Department of Economics, Department of Economics, University of St. Andrews 201302, Department of Economics, University of St. Andrews.
    2. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2011. "Manipulation of Choice Behavior," IZA Discussion Papers 5891, Institute for the Study of Labor (IZA).
    3. Pivato, Marcus, 2013. "Multiutility representations for incomplete difference preorders," Mathematical Social Sciences, Elsevier, Elsevier, vol. 66(3), pages 196-220.
    4. Nicolas Houy, 2008. "Progressive knowledge revealed preferences and sequential rationalizability," Working Papers hal-00360546, HAL.
    5. Papi, Mauro, 2012. "Satisficing choice procedures," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 84(1), pages 451-462.
    6. Christopher Tyson, 2013. "Behavioral implications of shortlisting procedures," Social Choice and Welfare, Springer, Springer, vol. 41(4), pages 941-963, October.
    7. Papi, Mauro, 2013. "Satisficing and maximizing consumers in a monopolistic screening model," Mathematical Social Sciences, Elsevier, Elsevier, vol. 66(3), pages 385-389.
    8. Manzini, Paola & Tyson, Christopher J. & Mariotti, Marco, 2013. "Two-stage threshold representations," 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:ecl:stabus:1714. 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: ().

    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.