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Non-rationalizable individuals and stochastic rationalizability

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  • Im, Changkuk
  • Rehbeck, John

Abstract

Experimental work regularly finds that individual choices are not deterministically rationalized by well-defined preferences. Nonetheless, recent work shows that data collected from many individuals can be stochastically rationalized by a distribution of well-defined preferences. We study the relationship between deterministic and stochastic rationalizability. We show that a population can be stochastically rationalized even when half of the individuals in the population cannot be deterministically rationalized.

Suggested Citation

  • Im, Changkuk & Rehbeck, John, 2022. "Non-rationalizable individuals and stochastic rationalizability," Economics Letters, Elsevier, vol. 219(C).
  • Handle: RePEc:eee:ecolet:v:219:y:2022:i:c:s0165176522002853
    DOI: 10.1016/j.econlet.2022.110786
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    References listed on IDEAS

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    More about this item

    Keywords

    Stochastic rationalizability; Revealed preference; Demand types;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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