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Reason-Based Choice And Context-Dependence: An Explanatory Framework

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  • Dietrich, Franz
  • List, Christian

Abstract

We introduce a “reason-based” framework for explaining and predicting individual choices. The key idea is that a decision-maker focuses on some but not all properties of the options and chooses an option whose “motivationally salient” properties he/she most prefers. Reason-based explanations can capture two kinds of contextdependent choice: (i) the motivationally salient properties may vary across choice contexts, and (ii) they may include “context-related” properties, not just “intrinsic” properties of the options. Our framework allows us to explain boundedly rational and sophisticated choice behaviour. Since properties can be recombined in new ways, it also offers resources for predicting choices in unobserved contexts.
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  • Dietrich, Franz & List, Christian, 2016. "Reason-Based Choice And Context-Dependence: An Explanatory Framework," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 175-229, July.
  • Handle: RePEc:cup:ecnphi:v:32:y:2016:i:02:p:175-229_00
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    1. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, Oxford University Press, vol. 124(1), pages 51-104.
    2. Franz Dietrich & Christian List, 2013. "Where do preferences come from?," International Journal of Game Theory, Springer;Game Theory Society, vol. 42(3), pages 613-637, August.
    3. Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1133-1165.
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    8. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    9. Bossert, Walter & Suzumura, Kotaro, 2010. "Consistency, Choice, and Rationality," Economics Books, Harvard University Press, number 9780674052994, December.
    10. de Clippel, Geoffroy & Eliaz, Kfir, 2012. "Reason-based choice: a bargaining rationale for the attraction and compromise effects," Theoretical Economics, Econometric Society, vol. 7(1), January.
    11. Gold, Natalie & List, Christian, 2004. "Framing as Path Dependence," Economics and Philosophy, Cambridge University Press, vol. 20(02), pages 253-277, October.
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    14. W. M. Gorman, 1980. "A Possible Procedure for Analysing Quality Differentials in the Egg Market," Review of Economic Studies, Oxford University Press, vol. 47(5), pages 843-856.
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    16. repec:hal:wpaper:halshs-01249632 is not listed on IDEAS
    17. Franz Dietrich & Christian List, 2011. "A model of non-informational preference change," Journal of Theoretical Politics, , vol. 23(2), pages 145-164, April.
    18. Richard Blundell, 2005. "Presidential Address: How Revealing Is Revealed Preference?," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 211-235, 04/05.
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    26. Franz Dietrich & Christian List, 2013. "Where do preferences come from? A summary," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00978022, HAL.
    27. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 249-281, July.
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    Cited by:

    1. repec:hal:wpaper:halshs-01249632 is not listed on IDEAS
    2. Dino Borie & Dorian Jullien, 2017. "Description-dependent Choices," Working Papers halshs-01651086, HAL.
    3. Dorian Jullien, 2016. "All Frames Created Equal are Not Identical: On the Structure of Kahneman and Tversky's Framing Effects," GREDEG Working Papers 2016-17, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
    4. repec:hal:journl:halshs-01249632 is not listed on IDEAS
    5. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 249-281, July.
    6. repec:eee:jetheo:v:176:y:2018:i:c:p:1-54 is not listed on IDEAS
    7. Dietrich, Franz, 2018. "Savage's theorem under changing awareness," Journal of Economic Theory, Elsevier, vol. 176(C), pages 1-54.
    8. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 249-281, July.

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    JEL classification:

    • J1 - Labor and Demographic Economics - - Demographic Economics

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