The Choice Environment, Constraints, and Rational Procedures

27 Pages Posted: 13 Oct 2018

See all articles by Paulo Oliva

Paulo Oliva

Queen Mary University of London - School of Electronic Engineering and Computer Science

Philipp Zahn

University of St. Gallen

Date Written: September 18, 2018

Abstract

In decision theory a choice problem is abstractly represented as a set of alternatives. But when facing a concrete choice, an agent typically cannot access this set at once. For instance, when buying online, he needs to navigate a search result in multiple steps, manually clicking to move from page to page. An agent’s choice procedure has to respect this constraint.

In this paper we develop a theory of constraints imposed by the environment and of choice procedures operating on them. We ask which properties procedures have to fulfill such that their choices can equivalently be understood as a maximization of a rational preference relation when the constraints are ignored. We fully characterize such procedures and establish that they are linked to well known properties such as Sen’s α. What is more, we show that there exist purely procedural properties that are sufficient for a rationalization.

Keywords: Rationalizability, Choice Procedures, Environment

JEL Classification: D01, D03, D00

Suggested Citation

Oliva, Paulo and Zahn, Philipp, The Choice Environment, Constraints, and Rational Procedures (September 18, 2018). Available at SSRN: https://ssrn.com/abstract=3252648 or http://dx.doi.org/10.2139/ssrn.3252648

Paulo Oliva

Queen Mary University of London - School of Electronic Engineering and Computer Science ( email )

Mile End Road, Mile End
London, England E1 4NS
United Kingdom

Philipp Zahn (Contact Author)

University of St. Gallen ( email )

Dufourstrasse 50
St.Gallen, CH-9000
Switzerland

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