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Rationalising Choice with Multi‐self Models

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  • Attila Ambrus
  • Kareen Rozen

Abstract

This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a method for characterizing the extent of irrationality in a choice behavior, and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions. Under an additional assumption (scale-invariance), we show that generically at most five "reasons" are needed for every "mistake."
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Suggested Citation

  • Attila Ambrus & Kareen Rozen, 2015. "Rationalising Choice with Multi‐self Models," Economic Journal, Royal Economic Society, vol. 125(585), pages 1136-1156, June.
  • Handle: RePEc:wly:econjl:v:125:y:2015:i:585:p:1136-1156
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    File URL: http://hdl.handle.net/10.1111/ecoj.2015.125.issue-585
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    References listed on IDEAS

    as
    1. Simonson, Itamar, 1989. " Choice Based on Reasons: The Case of Attraction and Compromise Effects," Journal of Consumer Research, Oxford University Press, vol. 16(2), pages 158-174, September.
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    7. Dekel, Eddie & Lipman, Barton L & Rustichini, Aldo, 2001. "Representing Preferences with a Unique Subjective State Space," Econometrica, Econometric Society, vol. 69(4), pages 891-934, July.
    8. John P. Conley & Simon Wilkie & Richard P. McLean, 1996. "Reference functions and possibility theorems for cardinal social choice problems," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 14(1), pages 65-78.
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    10. Uzi Segal, 2000. "Let's Agree That All Dictatorships Are Equally Bad," Journal of Political Economy, University of Chicago Press, vol. 108(3), pages 569-589, June.
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    Citations

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    Cited by:

    1. Dalton, Patricio S. & Ghosal, Sayantan, 2013. "Characterizing Behavioral Decisions with Choice Datas," SIRE Discussion Papers 2013-86, Scottish Institute for Research in Economics (SIRE).
    2. Kumabe, Masahiro & Mihara, H. Reiju, 2011. "Preference aggregation theory without acyclicity: The core without majority dissatisfaction," Games and Economic Behavior, Elsevier, vol. 72(1), pages 187-201, May.
    3. repec:eee:jetheo:v:172:y:2017:i:c:p:163-201 is not listed on IDEAS
    4. Geoffroy de Clippel, 2014. "Behavioral Implementation," American Economic Review, American Economic Association, vol. 104(10), pages 2975-3002, October.
    5. de Clippel, Geoffroy & Eliaz, Kfir, 2012. "Reason-based choice: a bargaining rationale for the attraction and compromise effects," Theoretical Economics, Econometric Society, vol. 7(1), January.
    6. Apesteguia, Jose & Ballester, Miguel A., 2013. "Choice by sequential procedures," Games and Economic Behavior, Elsevier, vol. 77(1), pages 90-99.
    7. Danan, Eric & Gajdos, Thibault & Tallon, Jean-Marc, 2013. "Aggregating sets of von Neumann–Morgenstern utilities," Journal of Economic Theory, Elsevier, vol. 148(2), pages 663-688.
    8. 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.
    9. Manzini, Paola & Mariotti, Marco & Tyson, Christopher J., 2011. "Manipulation of Choice Behavior," IZA Discussion Papers 5891, Institute for the Study of Labor (IZA).
    10. Jerry R. Green & Daniel Hojman, 2015. "Monotonic Aggregation of Preferences and the Rationalization of Choice Functions," Working Papers wp397, University of Chile, Department of Economics.
    11. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    12. Cherchye, Laurens & De Rock, Bram & Griffith, Rachel & O’Connell, Martin & Smith, Kate & Vermeulen, Frederic, 2017. "A New Year, a New You? Heterogeneity and Self-Control in Food Purchases," IZA Discussion Papers 11205, Institute for the Study of Labor (IZA).
    13. Matthew O. Jackson & Leeat Yariv, 2014. "Present Bias and Collective Dynamic Choice in the Lab," American Economic Review, American Economic Association, vol. 104(12), pages 4184-4204, December.
    14. repec:hal:cesptp:halshs-00788647 is not listed on IDEAS
    15. Masatlioglu, Yusufcan & Nakajima, Daisuke, 2013. "Choice by iterative search," Theoretical Economics, Econometric Society, vol. 8(3), September.
    16. 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.
    17. Shaofang Qi, 2016. "A characterization of the n-agent Pareto dominance relation," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 46(3), pages 695-706, March.
    18. Sophie Bade, 2016. "Pareto-optimal matching allocation mechanisms for boundedly rational agents," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 47(3), pages 501-510, October.

    More about this item

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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