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Sequentially rationalizable choice with transitive rationales

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  • Au, Pak Hung
  • Kawai, Keiichi

Abstract

In this note, we analyze a sequentially rationalizable choice model with a transitive rationale and a standard preference. The model in this note is more restrictive than the Rational Shortlist Method (RSM) model which is proposed in Manzini and Mariotti (2007) to capture cyclic behavior. Yet, a decision maker in our model exhibits cyclic behavior in general. We prove that the cyclicity of an indirectly revealed preference is exactly what distinguishes the RSM framework (a sequential choice model with a non-standard preference) from our transitive-RSM framework (a sequential choice model with a standard preference). We also provide a partial identification result on the representation.

Suggested Citation

  • Au, Pak Hung & Kawai, Keiichi, 2011. "Sequentially rationalizable choice with transitive rationales," Games and Economic Behavior, Elsevier, vol. 73(2), pages 608-614.
    • Handle: RePEc:eee:gamebe:v:73:y:2011:i:2:p:608-614
    DOI: 10.1016/j.geb.2011.02.005
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    References listed on IDEAS

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    1. , & ,, 2012. "Choice by lexicographic semiorders," Theoretical Economics, Econometric Society, vol. 7(1), January.
    2. Starmer, Chris & Sugden, Robert, 1998. "Testing Alternative Explanations of Cyclical Choices," Economica, London School of Economics and Political Science, vol. 65(259), pages 347-361, August.
    3. Paola Manzini & Marco Mariotti, 2007. "Sequentially Rationalizable Choice," American Economic Review, American Economic Association, vol. 97(5), pages 1824-1839, December.
    4. Loomes, Graham & Starmer, Chris & Sugden, Robert, 1991. "Observing Violations of Transitivity by Experimental Methods," Econometrica, Econometric Society, vol. 59(2), pages 425-439, March.
    5. García-Sanz, María D. & Alcantud, José Carlos R., 2010. "Rational choice by two sequential criteria," MPRA Paper 21487, University Library of Munich, Germany.
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    More about this item

    Keywords

    Sequentially rationalizable choice; Rationalization;

    JEL classification:

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

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