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Cognitive constraints, contraction consistency, and the satisficing criterion

  • Tyson, Christopher J.

A theory of decision-making is proposed that speaks to Herbert Simon's methodological critique of economics without resorting to excessive reductionism. Formally, the new theory removes the Contraction axiom of conventional choice theory (which is itself reviewed in detail). In its interpretation, the theory reflects a conceit that decision makers may not fully perceive their preferences among alternatives, with perceived preference being assumed to possess different sets of properties. A utility-based representation of the postulated behavior is obtained, and is seen to be reminiscent of Simon's notion of "satisficing."

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Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 138 (2008)
Issue (Month): 1 (January)
Pages: 51-70

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Handle: RePEc:eee:jetheo:v:138:y:2008:i:1:p:51-70
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622869

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