Pairwise Normalization: A Neuroeconomic Theory of Multi-Attribute Choice

35 Pages Posted: 9 May 2017 Last revised: 17 May 2018

Peter Landry

University of Toronto - Rotman School of Management

Ryan Webb

University of Toronto

Date Written: May 14, 2018

Abstract

We present a theory of multi-attribute choice based on a notion of pairwise, attribute-level comparisons through (divisive) normalization — a form of relative value encoding observed in neural processing across sensory modalities and in species ranging from honeybees to humans. The model uniquely captures a broad range of context-dependent behaviors that are commonly reported in the experimental literature, while also providing a proposed neurobiological basis for some classic microeconomic preference representations.

Suggested Citation

Landry, Peter and Webb, Ryan, Pairwise Normalization: A Neuroeconomic Theory of Multi-Attribute Choice (May 14, 2018). Available at SSRN: https://ssrn.com/abstract=2963863 or http://dx.doi.org/10.2139/ssrn.2963863

Peter Landry

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Ryan Webb (Contact Author)

University of Toronto ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

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