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Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods

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  • Manzini, Paola

    (University of Bristol)

  • Mariotti, Marco

    (Queen Mary, University of London)

Abstract

A sequentially rationalizable choice function is a choice function which can be obtained by applying sequentially a fixed set of asymmetric binary relations (rationales). A Rational ShortlistMethod (RSM) is a choice function which is sequentially rationalizable by two rationales. These concepts translate into economic language some human choice heuristics studied in psychology. We provide a full characterization of RSMs and study some properties of sequential rationalizability. These properties allow some degree of menu dependence in choice.

Suggested Citation

  • Manzini, Paola & Mariotti, Marco, 2004. "Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods," IZA Discussion Papers 1239, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp1239
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    References listed on IDEAS

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    Cited by:

    1. Paola Manzini & Marco Mariotti, 2009. "Consumer choice and revealed bounded rationality," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 41(3), pages 379-392, December.
    2. Ariel Rubinstein & Yuval Salant, 2006. "Two Comments on the Principle of Revealed Preference," Levine's Bibliography 321307000000000272, UCLA Department of Economics.
    3. José Alcantud, 2006. "Notes and Comments: Stochastic demand correspondences and their aggregation properties," Decisions in Economics and Finance, Springer;Associazione per la Matematica, vol. 29(1), pages 55-69, May.

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    More about this item

    Keywords

    incomplete preferences; intransitive choice; bounded rationality; menu dependence; rationalizability of choice;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General

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