Reason-Based Choice: A Bargaining Rationale for the Attraction and Compromise Effects
Among the most important and robust violations of rationality are the attraction and the compromise effects. The compromise effect refers to the tendency of individuals to choose an intermediate option in a choice set, while the attraction effect refers to the tendency to choose an option that dominates some other options in the choice set. This paper argues that both effects may result from an individual’s attempt to overcome the difficulty of making a choice in the absence of a single criterion for ranking the options. Moreover, we propose to view the resolution of this choice problem as a cooperative solution to an intra-personal bargaining problem among different selves of an individual, where each self represents a different criterion for choosing. We first identify a set of properties that characterize those choice correspondences that coincide with our bargaining solution, for some pair of preference relations. Second, we provide a revealed-preference foundation to our bargaining solution and characterize the extent to which these two preference relations can be uniquely identified. Alternatively, our analysis may be reinterpreted as a study of (inter-personal) bilateral bargaining over a finite set of options. In that case, our results provide a new characterization, as well as testable implications, of an ordinal bargaining solution that has been previously discussed in the literature under the various names of fallback bargaining, unanimity compromise, Rawlsian arbitration rule and Kant- Rawls social compromise.
|Date of creation:||2009|
|Date of revision:|
|Contact details of provider:|| Postal: |
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Chambers, Christopher P. & Echenique, Federico, 2008.
"The core matchings of markets with transfers,"
1298, California Institute of Technology, Division of the Humanities and Social Sciences.
- repec:fiu:wpaper:0518 is not listed on IDEAS
- Kfir Eliaz & Ran Spiegler, 2004.
"Contracting with Diversely Naïve Agents,"
122247000000000530, UCLA Department of Economics.
- Pierre-André Chiappori & Olivier Donni, 2005.
"Learning From a Piece of Pie: The Empirical Content of Nash Bargaining,"
THEMA Working Papers
2006-07, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
- Chiappori, Pierre-André & Donni, Olivier, 2006. "Learning from a Piece of Pie: The Empirical Content of Nash Bargaining," IZA Discussion Papers 2128, Institute for the Study of Labor (IZA).
- Pierre-André Chiappori & Olivier Donni, 2006. "Learning from a Piece of Pie: the Empirical Content of Nash Bargaining," Cahiers de recherche 0619, CIRPEE.
- Lombardi, Michele, 2009.
"Reason-based choice correspondences,"
Mathematical Social Sciences,
Elsevier, vol. 57(1), pages 58-66, January.
- Attila Ambrus & Kareen Rozen, 2012.
"Rationalizing Choice with Multi-Self Models,"
Levine's Working Paper Archive
786969000000000512, David K. Levine.
- Attila Ambrus & Kareen Rozen, 2012. "Rationalizing Choice with Multi-Self Models," Working Papers 12-11, Duke University, Department of Economics.
- Attila Ambrus & Kareen Rozen, 2008. "Rationalizing Choice with Multi-Self Models," Cowles Foundation Discussion Papers 1670, Cowles Foundation for Research in Economics, Yale University, revised May 2012.
- Green, Jerry & Hojman, Daniel, 2007. "Choice, Rationality and Welfare Measurement," Working Paper Series rwp07-054, Harvard University, John F. Kennedy School of Government.
- Gil Kalai & Ariel Rubinstein & Ran Spiegler, 2002.
"Rationalizing Choice Functions By Multiple Rationales,"
Econometric Society, vol. 70(6), pages 2481-2488, November.
- Gil Kalai & Ariel Rubinstein & Ran Spiegler, 2001. "Rationalizing Choice Functions by Multiple Rationales," Discussion Paper Series dp278, The Federmann Center for the Study of Rationality, the Hebrew University, Jerusalem.
- Gil Kalai & Ariel Rubenstein & Ran Spiegler, 2001. "Rationalizing Choice Functions by Multiple Rationales," Economics Working Papers 0010, Institute for Advanced Study, School of Social Science.
- Anbarci, Nejat, 1993. "Noncooperative Foundations of the Area Monotonic Solutions," The Quarterly Journal of Economics, MIT Press, vol. 108(1), pages 245-58, February.
- Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012.
American Economic Review,
American Economic Association, vol. 102(5), pages 2183-2205, August.
- Kfir Eliaz & Michael Richter & Ariel Rubinstein, 2011. "Choosing the two finalists," Economic Theory, Springer, vol. 46(2), pages 211-219, February.
- repec:bla:restud:v:73:y:2006:i:3:p:689-714 is not listed on IDEAS
- Özgür Kıbrıs & Murat Sertel, 2007. "Bargaining over a finite set of alternatives," Social Choice and Welfare, Springer, vol. 28(3), pages 421-437, April.
When requesting a correction, please mention this item's handle: RePEc:bro:econwp:2009-4. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Brown Economics Webmaster)
If references are entirely missing, you can add them using this form.