Asymmetric Dominance, Deferral and Status Quo Bias in a Theory of Choice with Incomplete Preferences
This paper proposes a model of individual choice that does not assume completeness of the decision maker's preferences. The model helps explain in a natural way, and within a unied framework of choice in the presence of preference-incomparable options, three distinct behavioural phenomena: the asymmetric dominance/attraction effect, choice deferral and status quo bias. A decision maker who follows the decision rule featured in the model chooses an alternative from a menu if it is totally preference-undominated in that menu and at the same time is also partially preference-dominant. In situations where the decision maker's preferences are complete the model delivers strict utility maximisation.
|Date of creation:||07 Jul 2012|
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