Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods

28 Pages Posted: 11 Aug 2004

See all articles by Paola Manzini

Paola Manzini

University of St. Andrews - School of Economics and Finance; Institute for the Study of Labor (IZA)

Marco Mariotti

University of Exeter Business School - Department of Economics

Date Written: August 2004

Abstract

A sequentially rationalizable choice function is a choice function which can be obtained by applying sequentially a fixed set of asymmetric binary relations (rationales). A Rational ShortlistMethod (RSM) is a choice function which is sequentially rationalizable by two rationales. These concepts translate into economic language some human choice heuristics studied in psychology. We provide a full characterization of RSMs and study some properties of sequential rationalizability. These properties allow some degree of menu dependence in choice.

Keywords: rationalizability of choice, bounded rationality, intransitive choice, incomplete preferences, menu dependence

JEL Classification: D0

Suggested Citation

Manzini, Paola and Mariotti, Marco, Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods (August 2004). IZA Discussion Paper No. 1239. Available at SSRN: https://ssrn.com/abstract=575023

Paola Manzini (Contact Author)

University of St. Andrews - School of Economics and Finance ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

HOME PAGE: http://www.st-andrews.ac.uk/~pm210/

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Marco Mariotti

University of Exeter Business School - Department of Economics ( email )

Streatham Court
Rennes Drive
Exeter EX4 4RJ
United Kingdom
+01392 263219 (Phone)
+01392 263242 (Fax)

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