CATEGORIZE THEN CHOOSE: BOUNDEDLY RATIONAL CHOICE AND WELFARE

By Paola Manzini, Marco Mariotti. 2012

178 citations recorded by the source corpus.

We propose a boundedly rational model of choice where agents categorize alternatives before choosing. The model explains some behavioral anomalies, and it is fully characterized by a property of choice data: a categorizer can never exhibit certain patterns of “revealed preference reversals”. This model offers clues on the problem of making welfare judgements in the presence of boundedly rational agents.

Subfields: Economics and Econometrics, General Decision Sciences, Safety Research

View Paper: https://www.semanticscholar.org/paper/61fbc28dd30f80494189b4f54abee47feee3f3c7