Categorize then choose: Boundedly rational choice and welfare

Paola Manzini*, Marco Mariotti

*Corresponding author for this work

Research output: Contribution to journalArticle (Academic Journal)peer-review

63 Citations (Scopus)

Abstract

We propose a boundedly rational model of choice where agents categorize alternatives before choosing. The model explains some behavioral anomalies, and it is fully characterized by a property of choice data: a categorizer can never exhibit certain patterns of "revealed preference reversals". This model offers clues on the problem of making welfare judgements in the presence of boundedly rational agents.

Original languageEnglish
Pages (from-to)1141-1165
Number of pages25
JournalJournal of the European Economic Association
Volume10
Issue number5
DOIs
Publication statusPublished - Oct 2012

Bibliographical note

Copyright:
Copyright 2012 Elsevier B.V., All rights reserved.

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