Rationalizing Choice with Multi-Self Models

42 Pages Posted: 16 Jul 2008 Last revised: 23 May 2012

See all articles by Attila Ambrus

Attila Ambrus

Duke University - Department of Economics

Kareen Rozen

Brown University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: May 22, 2012

Abstract

This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a method for characterizing the extent of irrationality in a choice behavior, and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions. Under an additional assumption (scale-invariance), we show that generically at most five "reasons" are needed for every "mistake."

Keywords: Multi-self models, Index of irrationality, IIA violations, Rationalizability

JEL Classification: D11, D13, D71

Suggested Citation

Ambrus, Attila and Rozen, Kareen, Rationalizing Choice with Multi-Self Models (May 22, 2012). Cowles Foundation Discussion Paper No. 1670. Available at SSRN: https://ssrn.com/abstract=1160290

Attila Ambrus

Duke University - Department of Economics ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

Kareen Rozen (Contact Author)

Brown University - Department of Economics ( email )

64 Waterman Street
Providence, RI 02912
United States

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