IDEAS home Printed from https://ideas.repec.org/a/the/publsh/1547.html
   My bibliography  Save this article

Monotone threshold representations

Author

Listed:
  • ,

    (Cowles Foundation for Research in Economics, Yale University)

Abstract

Motivated by the literature on ``choice overload'', we study a boundedly rational agent whose choice behavior admits a \textit{monotone threshold representation}: There is an underlying rational benchmark, corresponding to maximization of a utility function $v$, from which the agent's choices depart in a menu-dependent manner. The severity of the departure is quantified by a threshold map $\delta$, which is monotone with respect to set inclusion. We derive an axiomatic characterization of the model, extending familiar characterizations of rational choice. We classify monotone threshold representations as a special case of Simon's theory of ``satisficing'', but as strictly more general than both Tyson's (2008) ``expansive satisficing'' model as well as Fishburn (1975) and Luce's (1956) model of choice behavior generated by a semiorder. We axiomatically characterize the difference, providing novel foundations for these models.

Suggested Citation

  • ,, 2016. "Monotone threshold representations," Theoretical Economics, Econometric Society, vol. 11(3), September.
    • Handle: RePEc:the:publsh:1547
    as

    Download full text from publisher

    File URL: http://econtheory.org/ojs/index.php/te/article/viewFile/20160757/16163/469
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mandler, Michael & Manzini, Paola & Mariotti, Marco, 2012. "A million answers to twenty questions: Choosing by checklist," Journal of Economic Theory, Elsevier, vol. 147(1), pages 71-92.
    2. Ellis, Andrew, 2018. "Foundations for optimal inattention," Journal of Economic Theory, Elsevier, vol. 173(C), pages 56-94.
    3. Tyson, Christopher J., 2008. "Cognitive constraints, contraction consistency, and the satisficing criterion," Journal of Economic Theory, Elsevier, vol. 138(1), pages 51-70, January.
    4. , & ,, 2013. "Choice by iterative search," Theoretical Economics, Econometric Society, vol. 8(3), September.
    5. Ortoleva, Pietro, 2013. "The price of flexibility: Towards a theory of Thinking Aversion," Journal of Economic Theory, Elsevier, vol. 148(3), pages 903-934.
    6. Amartya Sen, 1969. "Quasi-Transitivity, Rational Choice and Collective Decisions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 36(3), pages 381-393.
    7. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    8. Malhotra, Naresh K, 1982. "Information Load and Consumer Decision Making," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 8(4), pages 419-430, March.
    9. , & ,, 2011. "Search, choice, and revealed preference," Theoretical Economics, Econometric Society, vol. 6(1), January.
    10. Tyson, Christopher J., 2008. "Cognitive constraints, contraction consistency, and the satisficing criterion," Journal of Economic Theory, Elsevier, vol. 138(1), pages 51-70, January.
    11. Efe A. Ok & Pietro Ortoleva & Gil Riella, 2015. "Revealed (P)Reference Theory," American Economic Review, American Economic Association, vol. 105(1), pages 299-321, January.
    12. Huber, Joel & Payne, John W & Puto, Christopher, 1982. "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 9(1), pages 90-98, June.
    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. Deb, Joyee & Zhou, Jidong, 2018. "Reference Dependence and Choice Overload," MPRA Paper 86261, University Library of Munich, Germany.
    2. repec:hal:psewpa:halshs-01998001 is not listed on IDEAS
    3. Aguiar, Victor H. & Kimya, Mert, 2019. "Adaptive stochastic search," Journal of Mathematical Economics, Elsevier, vol. 81(C), pages 74-83.
    4. Huseynov, Samir & Palma, Marco A. & Ahmad, Ghufran, 2021. "Does the magnitude of relative calorie distance affect food consumption?," Journal of Economic Behavior & Organization, Elsevier, vol. 188(C), pages 530-551.
    5. Georgios Gerasimou, 2020. "The Decision-Conflict Logit," Papers 2008.04229, arXiv.org, revised Aug 2023.
    6. Elias Bouacida, 2021. "Identifying Choice Correspondences," Working Papers 327800275, Lancaster University Management School, Economics Department.
    7. D. Pennesi, 2016. "When perfectionism becomes willpower," Working Papers wp1050, Dipartimento Scienze Economiche, Universita' di Bologna.
    8. Caliari, Daniele, 2023. "Behavioural welfare analysis and revealed preference: Theory and experimental evidence," Discussion Papers, Research Unit: Economics of Change SP II 2023-303, WZB Berlin Social Science Center.
    9. Elias Bouacida, 2021. "Identifying Choice Correspondences," Working Papers halshs-01998001, HAL.
    10. Maltz, Amnon & Rachmilevitch, Shiran, 2021. "A model of menu-dependent evaluations and comparison-aversion," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 91(C).
    11. Xiaosheng Mu, 2019. "Amendment Voting with Incomplete Preferences," Working Papers 2019-29, Princeton University. Economics Department..
    12. Gerasimou, Georgios & Papi, Mauro, 2018. "Duopolistic competition with choice-overloaded consumers," European Economic Review, Elsevier, vol. 101(C), pages 330-353.
    13. Dan Qin, 2021. "A Note on Numerical Representations of Nested System of Strict Partial Orders," Games, MDPI, vol. 12(3), pages 1-9, July.
    14. Daniele Pennesi, 2018. "Perfectionism and willpower," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 6(1), pages 101-110, April.

    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. Valentino Dardanoni & Paola Manzini & Marco Mariotti & Christopher J. Tyson, 2020. "Inferring Cognitive Heterogeneity From Aggregate Choices," Econometrica, Econometric Society, vol. 88(3), pages 1269-1296, May.
    2. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2016. "Partial knowledge restrictions on the two-stage threshold model of choice," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 41-47.
    3. Christopher Tyson, 2015. "Satisficing behavior with a secondary criterion," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 639-661, March.
    4. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2016. "Partial knowledge restrictions on the two-stage threshold model of choice," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 41-47.
    5. Valentino Dardanoni & Paola Manzini & Marco Mariotti & Christopher J. Tyson, 2020. "Inferring Cognitive Heterogeneity From Aggregate Choices," Econometrica, Econometric Society, vol. 88(3), pages 1269-1296, May.
    6. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    7. Yukinori Iwata, 2018. "Salience and limited attention," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 50(1), pages 123-146, January.
    8. Christopher Tyson, 2015. "Satisficing behavior with a secondary criterion," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(3), pages 639-661, March.
    9. Lleras, Juan Sebastián & Masatlioglu, Yusufcan & Nakajima, Daisuke & Ozbay, Erkut Y., 2017. "When more is less: Limited consideration," Journal of Economic Theory, Elsevier, vol. 170(C), pages 70-85.
    10. Spears Dean, 2011. "Intertemporal Bounded Rationality as Consideration Sets with Contraction Consistency," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 11(1), pages 1-16, June.
    11. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J, 2015. "Partial Knowledge Restrictions on theTwo-Stage Threshold Model of Choice," 2007 Annual Meeting, July 29-August 1, 2007, Portland, Oregon TN 2015-58, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Aguiar, Victor H. & Kimya, Mert, 2019. "Adaptive stochastic search," Journal of Mathematical Economics, Elsevier, vol. 81(C), pages 74-83.
    13. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2016. "Partial knowledge restrictions on the two-stage threshold model of choice," Journal of Mathematical Economics, Elsevier, vol. 64(C), pages 41-47.
    14. Dinko Dimitrov & Saptarshi Mukherjee & Nozomu Muto, 2016. "‘Divide-and-choose’ in list-based decision problems," Theory and Decision, Springer, vol. 81(1), pages 17-31, June.
    15. Georgios, Gerasimou, 2013. "A Behavioural Model of Choice in the Presence of Decision Conflict," SIRE Discussion Papers 2013-25, Scottish Institute for Research in Economics (SIRE).
    16. Juan P. Aguilera & Levent Ülkü, 2017. "On the maximization of menu-dependent interval orders," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 48(2), pages 357-366, February.
    17. Saptarshi Mukherjee, 2014. "Choice in ordered-tree-based decision problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 43(2), pages 471-496, August.
    18. Xi Zhi Lim, 2022. "Choice and Attention across Time," Papers 2203.03243, arXiv.org, revised Mar 2024.
    19. Ronayne, David & Brown, Gordon D.A., 2016. "Multi-attribute decision by sampling: An account of the attraction, comprimise and similarity effects," The Warwick Economics Research Paper Series (TWERPS) 1124, University of Warwick, Department of Economics.
    20. Apesteguia, Jose & Ballester, Miguel A., 2013. "Choice by sequential procedures," Games and Economic Behavior, Elsevier, vol. 77(1), pages 90-99.

    More about this item

    Keywords

    Bounded rationality; threshold representations; satisficing; choice; revealed preference;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

    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:the:publsh:1547. 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: Martin J. Osborne (email available below). General contact details of provider: http://econtheory.org .

    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.