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The Foundations of Imperfect Decision Making

Listed author(s):
  • Tyson, Chris

    (Stanford U)

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    A theory of decision-making is proposed that speaks to Herbert Simon's methodological critique of economics without resorting to excessive reductionism. Formally, the new theory removes the Contraction axiom of conventional choice theory (which is itself reviewed in detail). In its interpretation, the theory reflects a conceit that decision makers may not fully perceive their preferences among alternatives, with perceived preference being assumed to possess different sets of properties. A utility-based representation of the postulated behavior is obtained, and is seen to be reminiscent of Simon's notion of "satisficing."

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    File URL: http://gsbapps.stanford.edu/researchpapers/library/RP1714.pdf
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    Paper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1714.

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    Date of creation: Nov 2001
    Handle: RePEc:ecl:stabus:1714
    Contact details of provider: Postal:
    Stanford University, Stanford, CA 94305-5015

    Phone: (650) 723-2146
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    Web page: http://gsbapps.stanford.edu/researchpapers/
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    8. Amartya Sen, 1996. "Maximization and the Act of Choice," Harvard Institute of Economic Research Working Papers 1766, Harvard - Institute of Economic Research.
    9. Sen, Amartya K, 1973. "Behaviour and the Concept of Preference," Economica, London School of Economics and Political Science, vol. 40(159), pages 241-259, August.
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    21. Eytan Sheshinski, 2003. "Bounded Rationality and Socially Optimal Limits on Choice in a Self-Selection Model," CESifo Working Paper Series 868, CESifo Group Munich.
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    26. José Apesteguía & Miguel A. Ballester, 2005. "Minimal Books Of Rationales," Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra 0501, Departamento de Economía - Universidad Pública de Navarra.
    27. Wulf Gaertner & Yongsheng Xu, 1999. "On rationalizability of choice functions: A characterization of the median," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 16(4), pages 629-638.
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