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State dependent choice

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  • Paola Manzini

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  • Marco Mariotti

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Abstract

We propose a theory of choices that are influenced by the psychological state of the agent. The central hypothesis is that the psychological state controls the urgency of the attributes sought by the decision maker in the available alternatives. While state dependent choice is less restricted than rational choice, our model does have empirical content, expressed by simple ‘revealed preference’ type of constraints on observable choice data. We demonstrate the applicability of simple versions of the framework to economic contexts. We show in particular that it can explain widely researched anomalies in the labour supply of taxi drivers. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • Paola Manzini & Marco Mariotti, 2015. "State dependent choice," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 45(2), pages 239-268, September.
  • Handle: RePEc:spr:sochwe:v:45:y:2015:i:2:p:239-268
    DOI: 10.1007/s00355-015-0894-3
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    References listed on IDEAS

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    Cited by:

    1. Laurens Cherchye & Bram De Rock & Rachel Griffith & Martin O'Connell & Kate Smith & Frederic Vermeulen, 2017. "A New Year, a New You ?Heterogeneity and Self-control in Food Purchases," Working Papers ECARES ECARES 2017-46, ULB -- Universite Libre de Bruxelles.

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    Keywords

    D01;

    JEL classification:

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

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