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Reason-Based Rationalization

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  • Franz Dietrich
  • Christian List

Abstract

We introduce a “reason-based” way of rationalizing an agent’s choice behaviour, which explains choices by specifying which properties of the options or choice context the agent cares about (the “motivationally salient properties”) and how he or she cares about these properties (the “fundamental preference relation”). Reason-based rationalizations can explain non-classical choice behaviour, including boundedly rational and sophisticated rational behaviour, and predict choices in unobserved contexts, an issue neglected in standard choice theory. We characterize the behavioural implications of different reason-based models and distinguish two kinds of context-dependent motivation: “context-variant” motivation, where the agent cares about different properties in different contexts, and “context-regarding” motivation, where the agent cares not only about properties of the options, but also about properties relating to the context.
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Suggested Citation

  • Franz Dietrich & Christian List, 2013. "Reason-Based Rationalization," Levine's Working Paper Archive 786969000000000841, David K. Levine.
  • Handle: RePEc:cla:levarc:786969000000000841
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    References listed on IDEAS

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    1. Suzumura, Kotaro & Xu, Yongsheng, 2001. "Characterizations of Consequentialism and Nonconsequentialism," Journal of Economic Theory, Elsevier, vol. 101(2), pages 423-436, December.
    2. Paola Manzini & Marco Mariotti, 2007. "Sequentially Rationalizable Choice," American Economic Review, American Economic Association, vol. 97(5), pages 1824-1839, December.
    3. Dietrich, Franz, 2012. "Modelling change in individual characteristics: An axiomatic framework," Games and Economic Behavior, Elsevier, vol. 76(2), pages 471-494.
    4. Gil Kalai & Ariel Rubinstein & Ran Spiegler, 2002. "Rationalizing Choice Functions By Multiple Rationales," Econometrica, Econometric Society, vol. 70(6), pages 2481-2488, November.
    5. 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.
    6. Dietrich, Franz & List, Christian, 2016. "Mentalism Versus Behaviourism In Economics: A Philosophy-Of-Science Perspective," Economics and Philosophy, Cambridge University Press, vol. 32(02), pages 249-281, July.
    7. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    8. Ariel Rubinstein, 2006. "Lecture Notes in Microeconomic Theory," Online economics textbooks, SUNY-Oswego, Department of Economics, number gradmicro1.
    9. B. Douglas Bernheim & Antonio Rangel, 2009. "Beyond Revealed Preference: Choice-Theoretic Foundations for Behavioral Welfare Economics," The Quarterly Journal of Economics, Oxford University Press, vol. 124(1), pages 51-104.
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    More about this item

    JEL classification:

    • B40 - Schools of Economic Thought and Methodology - - Economic Methodology - - - General
    • B49 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Other
    • B5 - Schools of Economic Thought and Methodology - - Current Heterodox Approaches
    • C0 - Mathematical and Quantitative Methods - - General
    • C00 - Mathematical and Quantitative Methods - - General - - - General
    • D0 - Microeconomics - - General
    • D00 - Microeconomics - - General - - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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