IDEAS home Printed from https://ideas.repec.org/a/eee/jetheo/v159y2015ipap326-338.html
   My bibliography  Save this article

Theory of decisions by intra-dimensional comparisons

Author

Listed:
  • Tserenjigmid, Gerelt

Abstract

Making a choice between multidimensional alternatives is a difficult task. Therefore, a decision maker may adopt some procedure (heuristic) to simplify this task. We provide an axiomatic model of one such heuristic called the Intra-Dimensional Comparison (IDC) heuristic. The IDC heuristic is well-documented in the experimental literature on choice under risk. The IDC heuristic is a procedure in which a decision maker compares multidimensional alternatives dimension-by-dimension and makes a decision based on those comparisons. The model of the IDC heuristic provides a general framework applicable to many different contexts, including risky choice and social choice.

Suggested Citation

  • Tserenjigmid, Gerelt, 2015. "Theory of decisions by intra-dimensional comparisons," Journal of Economic Theory, Elsevier, vol. 159(PA), pages 326-338.
    • Handle: RePEc:eee:jetheo:v:159:y:2015:i:pa:p:326-338
    DOI: 10.1016/j.jet.2015.07.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0022053115001246
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jet.2015.07.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amos Arieli & Yaniv Ben-Ami & Ariel Rubinstein, 2011. "Tracking Decision Makers under Uncertainty," American Economic Journal: Microeconomics, American Economic Association, vol. 3(4), pages 68-76, November.
    2. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(4), pages 1039-1061.
    3. Loomes, Graham & Sugden, Robert, 1982. "Regret Theory: An Alternative Theory of Rational Choice under Uncertainty," Economic Journal, Royal Economic Society, vol. 92(368), pages 805-824, December.
    4. Pedro Bordalo & Nicola Gennaioli & Andrei Shleifer, 2012. "Salience Theory of Choice Under Risk," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 127(3), pages 1243-1285.
    5. Budescu, David V. & Weiss, Wendy, 1987. "Reflection of transitive and intransitive preferences: A test of prospect theory," Organizational Behavior and Human Decision Processes, Elsevier, vol. 39(2), pages 184-202, April.
    6. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
    7. Loomes, Graham & Starmer, Chris & Sugden, Robert, 1991. "Observing Violations of Transitivity by Experimental Methods," Econometrica, Econometric Society, vol. 59(2), pages 425-439, March.
    8. Rubinstein, Ariel, 1988. "Similarity and decision-making under risk (is there a utility theory resolution to the Allais paradox?)," Journal of Economic Theory, Elsevier, vol. 46(1), pages 145-153, October.
    9. Ok, Efe A. & Masatlioglu, Yusufcan, 2007. "A theory of (relative) discounting," Journal of Economic Theory, Elsevier, vol. 137(1), pages 214-245, November.
    10. Brett Day & Graham Loomes, 2010. "Conflicting violations of transitivity and where they may lead us," Theory and Decision, Springer, vol. 68(1), pages 233-242, February.
    11. Denis Bouyssou & Marc Pirlot, 2002. "Nontransitive Decomposable Conjoint Measurement," Post-Print hal-02361942, HAL.
    12. Patrick Suppes & Muriel Winet, 1955. "An Axiomatization of Utility Based on the Notion of Utility Differences," Management Science, INFORMS, vol. 1(3-4), pages 259-270, 04-07.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tserenjigmid, Gerelt, 2019. "Choosing with the worst in mind: A reference-dependent model," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 631-652.
    2. Adriani, Fabrizio & Sonderegger, Silvia, 2020. "Optimal similarity judgments in intertemporal choice (and beyond)," Journal of Economic Theory, Elsevier, vol. 190(C).
    3. Narayanaswamy Balakrishnan & Efe A. Ok & Pietro Ortoleva, 2021. "Inferential Choice Theory," Working Papers 2021-60, Princeton University. Economics Department..
    4. Herweg, Fabian & Weinschenk, Philipp, 2022. "Multi-attribute heuristics and intertemporal choices," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 174-181.
    5. Sushil Bikhchandani & Uzi Segal, 2021. "Intransitivity in the small and in the large," Journal of Risk and Uncertainty, Springer, vol. 63(3), pages 257-273, December.
    6. Landry, Peter & Webb, Ryan, 2021. "Pairwise normalization: A neuroeconomic theory of multi-attribute choice," Journal of Economic Theory, Elsevier, vol. 193(C).
    7. Diecidue, Enrico & Somasundaram, Jeeva, 2017. "Regret theory: A new foundation," Journal of Economic Theory, Elsevier, vol. 172(C), pages 88-119.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Han Bleichrodt & Peter P. Wakker, 2015. "Regret Theory: A Bold Alternative to the Alternatives," Economic Journal, Royal Economic Society, vol. 0(583), pages 493-532, March.
    2. repec:cup:judgdm:v:16:y:2021:i:6:p:1324-1369 is not listed on IDEAS
    3. Herweg, Fabian & Müller, Daniel, 2021. "A comparison of regret theory and salience theory for decisions under risk," Journal of Economic Theory, Elsevier, vol. 193(C).
    4. Pavlo Blavatskyy, 2018. "A second-generation disappointment aversion theory of decision making under risk," Theory and Decision, Springer, vol. 84(1), pages 29-60, January.
    5. Sudeep Bhatia & Graham Loomes & Daniel Read, 2021. "Establishing the laws of preferential choice behavior," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 16(6), pages 1324-1369, November.
    6. Herweg, Fabian & Weinschenk, Philipp, 2022. "Multi-attribute heuristics and intertemporal choices," Journal of Economic Behavior & Organization, Elsevier, vol. 200(C), pages 174-181.
    7. Tserenjigmid, Gerelt, 2019. "Choosing with the worst in mind: A reference-dependent model," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 631-652.
    8. Ulrich Schmidt & Horst Zank, 2012. "A genuine foundation for prospect theory," Journal of Risk and Uncertainty, Springer, vol. 45(2), pages 97-113, October.
    9. Michael H. Birnbaum & Jeffrey P. Bahra, 2012. "Separating response variability from structural inconsistency to test models of risky decision making," Judgment and Decision Making, Society for Judgment and Decision Making, vol. 7(4), pages 402-426, July.
    10. Jonathan W. Leland & Mark Schneider, 2016. "Salience, Framing, and Decisions under Risk, Uncertainty, and Time," Working Papers 16-08, Chapman University, Economic Science Institute.
    11. Michael Birnbaum & Ulrich Schmidt, 2008. "An experimental investigation of violations of transitivity in choice under uncertainty," Journal of Risk and Uncertainty, Springer, vol. 37(1), pages 77-91, August.
    12. Adrian Bruhin & Maha Manai & Luís Santos-Pinto, 2022. "Risk and rationality: The relative importance of probability weighting and choice set dependence," Journal of Risk and Uncertainty, Springer, vol. 65(2), pages 139-184, October.
    13. Enrico Diecidue & Haim Levy & Moshe Levy, 2020. "Probability Dominance," The Review of Economics and Statistics, MIT Press, vol. 102(5), pages 1006-1020, December.
    14. Königsheim, C. & Lukas, M. & Nöth, M., 2019. "Salience theory: Calibration and heterogeneity in probability distortion," Journal of Economic Behavior & Organization, Elsevier, vol. 157(C), pages 477-495.
    15. Birnbaum, Michael H. & Gutierrez, Roman J., 2007. "Testing for intransitivity of preferences predicted by a lexicographic semi-order," Organizational Behavior and Human Decision Processes, Elsevier, vol. 104(1), pages 96-112, September.
    16. Gaudeul, Alexia, 2009. "A (micro) course in microeconomic theory for MSc students," MPRA Paper 15388, University Library of Munich, Germany.
    17. Aurélien Baillon & Han Bleichrodt & Alessandra Cillo, 2015. "A Tailor-Made Test of Intransitive Choice," Operations Research, INFORMS, vol. 63(1), pages 198-211, February.
    18. repec:oup:qjecon:v:128:y:2012:i:1:p:53-104 is not listed on IDEAS
    19. Adriani, Fabrizio & Sonderegger, Silvia, 2020. "Optimal similarity judgments in intertemporal choice (and beyond)," Journal of Economic Theory, Elsevier, vol. 190(C).
    20. repec:cup:judgdm:v:7:y:2012:i:4:p:402-426 is not listed on IDEAS
    21. Mark Schneider & Mikhael Shor, 2016. "The Common Ratio Effect in Choice, Pricing, and Happiness Tasks," Working papers 2016-29, University of Connecticut, Department of Economics.
    22. Alekseev, Aleksandr & Sokolov, Mikhail V., 2021. "How to measure the average rate of change?," Mathematical Social Sciences, Elsevier, vol. 113(C), pages 43-59.
    23. Nunnari, Salvatore & Zapal, Jan, 2017. "A Model of Focusing in Political Choice," CEPR Discussion Papers 12407, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Intra-dimensional comparison heuristic; Intransitivity; Risky choice; Social choice;
    All these keywords.

    JEL classification:

    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D90 - Microeconomics - - Micro-Based Behavioral Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jetheo:v:159:y:2015:i:pa:p:326-338. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622869 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.