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A Behavioural Model of Choice in the Presence of Decision Conflict

Listed author(s):
  • Georgios Gerasimou

    ()

This paper proposes a model of choice that does not assume completeness of the decision maker's preferences. The model explains in a natural way, and within a uni ed framework of choice when preference-incomparable options are present, four behavioural phenomena: the attraction eff ect, choice deferral, the strengthening of the attraction eff ect when deferral is permissible, and status quo bias. The key element in the proposed decision rule is that an individual chooses an alternative from a menu if it is worse than no other alternative in that menu and is also better than at least one. Utility-maximising behaviour is included as a special case when preferences are complete. The relevance of the partial dominance idea underlying the proposed choice procedure is illustrated with an intuitive generalisation of weakly dominated strategies and their iterated deletion in games with vector payo ffs.

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File URL: http://www.st-andrews.ac.uk/economics/repecfiles/4/1302.pdf
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Paper provided by Department of Economics, University of St. Andrews in its series Discussion Paper Series, Department of Economics with number 201302.

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Date of creation: 05 Jan 2013
Handle: RePEc:san:wpecon:1302
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  1. Jack L. Knetsch & J. A. Sinden, 1984. "Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value," The Quarterly Journal of Economics, Oxford University Press, vol. 99(3), pages 507-521.
  2. Ariel Rubinstein & Yuval Salant, 2012. "Eliciting Welfare Preferences from Behavioural Data Sets," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 375-387.
  3. Apesteguia, Jose & Ballester, Miguel A., 2013. "Choice by sequential procedures," Games and Economic Behavior, Elsevier, vol. 77(1), pages 90-99.
  4. Dhar, Ravi, 1997. " Consumer Preference for a No-Choice Option," Journal of Consumer Research, Oxford University Press, vol. 24(2), pages 215-231, September.
  5. Amos Tversky & Daniel Kahneman, 1991. "Loss Aversion in Riskless Choice: A Reference-Dependent Model," The Quarterly Journal of Economics, Oxford University Press, vol. 106(4), pages 1039-1061.
  6. Tyson, Christopher J., 2008. "Cognitive constraints, contraction consistency, and the satisficing criterion," Journal of Economic Theory, Elsevier, vol. 138(1), pages 51-70, January.
  7. Sophie Bade, 2005. "Nash equilibrium in games with incomplete preferences," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 26(2), pages 309-332, 08.
  8. de Clippel, Geoffroy & Eliaz, Kfir, 2012. "Reason-based choice: a bargaining rationale for the attraction and compromise effects," Theoretical Economics, Econometric Society, vol. 7(1), January.
  9. Lombardi, Michele, 2009. "Reason-based choice correspondences," Mathematical Social Sciences, Elsevier, vol. 57(1), pages 58-66, January.
  10. Luce, Mary Frances, 1998. " Choosing to Avoid: Coping with Negatively Emotion-Laden Consumer Decisions," Journal of Consumer Research, Oxford University Press, vol. 24(4), pages 409-433, March.
  11. Sen, Amartya K, 1977. "Social Choice Theory: A Re-examination," Econometrica, Econometric Society, vol. 45(1), pages 53-89, January.
  12. Michael Mandler, 2004. "Status quo maintenance reconsidered: changing or incomplete preferences?," Economic Journal, Royal Economic Society, vol. 114(499), pages 518-535, November.
  13. Ortoleva, Pietro, 2010. "Status quo bias, multiple priors and uncertainty aversion," Games and Economic Behavior, Elsevier, vol. 69(2), pages 411-424, July.
  14. Amartya K. Sen, 1971. "Choice Functions and Revealed Preference," Review of Economic Studies, Oxford University Press, vol. 38(3), pages 307-317.
  15. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
  16. David M. Kreps, 2012. "Microeconomic Foundations I: Choice and Competitive Markets," Economics Books, Princeton University Press, edition 1, number 9890.
  17. Samuelson, William & Zeckhauser, Richard, 1988. "Status Quo Bias in Decision Making," Journal of Risk and Uncertainty, Springer, vol. 1(1), pages 7-59, March.
  18. Huber, Joel & Payne, John W & Puto, Christopher, 1982. " Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, Oxford University Press, vol. 9(1), pages 90-98, June.
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