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Choice by sequential procedures

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  • Apesteguia, Jose
  • Ballester, Miguel A.

Abstract

We propose a rule of decision-making, the sequential procedure guided by routes, and show that three influential boundedly rational choice models can be equivalently understood as special cases of this rule. In addition, the sequential procedure guided by routes is instrumental in showing that the three models are intimately related. We show that choice with a status quo bias is a refinement of rationalizability by game trees, which, in turn, is also a refinement of sequential rationalizability. Thus, we provide a sharp taxonomy of these choice models, and show that they all can be understood as choice by sequential procedures.

Suggested Citation

  • Apesteguia, Jose & Ballester, Miguel A., 2013. "Choice by sequential procedures," Games and Economic Behavior, Elsevier, vol. 77(1), pages 90-99.
    • Handle: RePEc:eee:gamebe:v:77:y:2013:i:1:p:90-99
    DOI: 10.1016/j.geb.2012.09.006
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    More about this item

    Keywords

    Individual rationality; Bounded rationality; Behavioral economics;
    All these keywords.

    JEL classification:

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

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