Satisficing with a Variable Threshold

Abstract

We axiomatize a model of satisficing which features random thresholds and the possibility of choice abstention. Given a menu, the decision maker First randomly draws a threshold. Next, using a list order, she searches the menu for alternatives which are at least as good as the threshold. She chooses the first such alternative she finds, and if no such alternative exists, she abstains. Since the threshold is random, so is the resulting behavior. We characterize this model using two simple axioms. In general the revelation of the model's primitives is incomplete. We characterize a specialization of the model for which the underlying preference and list ordering are uniquely identified by choice frequencies. We also show that our model is a special Random Utility Model.

Keywords: Stochastic Choice, Satisficing, Random Thresholds, Stochastic Consideration

JEL Classification: D0