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Inferring Rationales from Choice : Identification for Rational Shortlist Methods

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  • Rohan Dutta
  • Sean Horan

Abstract

A wide variety of choice behavior inconsistent with preference maximization can be explained by Manzini and Mariotti's Rational Shortlist Methods. Choices are made by sequentially applying a pair of asymmetric binary relations (rationales) to eliminate inferior alternatives. Manzini and Mariotti's axiomatic treatment elegantly describes which behavior can be explained by this model. However, it leaves unanswered what can be inferred, from observed behavior, about the underlying rationales. Establishing this connection is fundamental not only for applied and empirical work but also for meaningful welfare analysis. Our results tightly characterize the surprisingly rich relationship between behavior and the underlying rationales.

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Bibliographic Info

Paper provided by Centre interuniversitaire de recherche en économie quantitative, CIREQ in its series Cahiers de recherche with number 09-2013.

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Length: 51 pages
Date of creation: 2013
Date of revision:
Handle: RePEc:mtl:montec:09-2013

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Keywords: Revealed Preference; Identification; Uniqueness; Two-stage Choice Procedures; Behavioral Industrial Organization; Comparative Advertising; Decoy Marketing; Welfare.;

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References

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  1. B. Douglas Bernheim & Antonio Rangel, 2007. "Toward Choice-Theoretic Foundations for Behavioral Welfare Economics," American Economic Review, American Economic Association, vol. 97(2), pages 464-470, May.
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  3. Jose Apesteguia & Miguel Angel Ballester, 2012. "Choice By Sequential Procedures," Working Papers 615, Barcelona Graduate School of Economics.
  4. Christopher Tyson, 2013. "Behavioral implications of shortlisting procedures," Social Choice and Welfare, Springer, vol. 41(4), pages 941-963, October.
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Cited by:
  1. Gent Bajraj & Levent Ülkü, 2013. "Choosing two Finalists and the Winner," Working Papers 1305, Centro de Investigacion Economica, ITAM.
  2. Matsuki, Jun & Tadenuma, Koichi, 2013. "Choice via Grouping Procedures," Discussion Papers 2013-08, Graduate School of Economics, Hitotsubashi University.

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