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Axiomatic Foundations for Satisficing Behavior

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  • Christopher J.Tyson

    ()
    (Nuffield College, Oxford)

Abstract

A theory of decision making is proposed that supplies an axiomatic basis for the concept of "satisficing" postulated by Herbert Simon. After a detailed review of classical results that characterize several varieties of preference-maximizing choice behavior, the axiomatization proceeds by weakening the inter-menu contraction consistency condition involved in these characterizations. This exercise is shown to be logically equivalent to dropping the usual cognitive assumption that the decision maker fully perceives his preferences among available alternatives, and requiring instead merely that his ability to perceive a given preference be weakly decreasing with respect to the relative complexity (indicated by set inclusion) of the choice problem at hand. A version of Simon's hypothesis then emerges when the notion of "perceived preference" is endowed with sufficiently strong ordering properties, and the axiomatization leads as well to a constraint on the form of satisficing that the decision maker may legitimately employ.

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Bibliographic Info

Paper provided by Economics Group, Nuffield College, University of Oxford in its series Economics Papers with number 2005-W03.

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Length: 25 pages
Date of creation: 06 Jan 2005
Date of revision:
Handle: RePEc:nuf:econwp:0503

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Web page: http://www.nuff.ox.ac.uk/economics/

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Cited by:
  1. Manzini, Paola & Tyson, Christopher J. & Mariotti, Marco, 2013. "Two-stage threshold representations," Theoretical Economics, Econometric Society, Econometric Society, vol. 8(3), September.
  2. Nicolas Houy, 2008. "Progressive knowledge revealed preferences and sequential rationalizability," Working Papers, HAL hal-00360546, HAL.
  3. Papi, Mauro, 2013. "Satisficing and maximizing consumers in a monopolistic screening model," Mathematical Social Sciences, Elsevier, Elsevier, vol. 66(3), pages 385-389.
  4. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2011. "Manipulation of Choice Behavior," IZA Discussion Papers 5891, Institute for the Study of Labor (IZA).
  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. Pivato, Marcus, 2012. "Multiutility representations for incomplete difference preorders," MPRA Paper 41182, University Library of Munich, Germany.
  7. Christopher J. Tyson, 2012. "Behavioral Implications of Shortlisting Procedures," Working Papers, Queen Mary, University of London, School of Economics and Finance 697, Queen Mary, University of London, School of Economics and Finance.
  8. Papi, Mauro, 2012. "Satisficing choice procedures," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 84(1), pages 451-462.

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