Rational Agents are the Quickest

Abstract:     
We consider agents who choose by proceeding through a checklist of criteria (for any pair of alternatives the first criterion that ranks the pair determines the agent's choice). Regardless of the discriminating capacity of the criteria, choices that maximize complete and transitive preferences can always be the outcome of a 'quick' checklist that uses the theoretical minimum number of criteria. For any irrational preference on the other hand there is always a discriminatory capacity for criteria such that the preference is not the outcome of a quick checklist. We also evaluate whether criteria that discriminate coarsely or finely are superior. Due to their cognitive limitations, agents are likely to use coarse criteria but these turn out to be the efficient way to generate preference rankings.

Number of Pages in PDF File: 37

Keywords: checklists, rationality, decision-making efficiency

JEL Classification: D01

working papers series