Categorize then choose: Boundedly rational choice and welfare

Paola Manzini; Marco Mariotti

doi:10.1111/j.1542-4774.2012.01078.x

Categorize then choose: Boundedly rational choice and welfare

Paola Manzini^*, Marco Mariotti

^*Corresponding author for this work

School of Economics

Research output: Contribution to journal › Article (Academic Journal) › peer-review

98 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 language	English
Pages (from-to)	1141-1165
Number of pages	25
Journal	Journal of the European Economic Association
Volume	10
Issue number	5
DOIs	https://doi.org/10.1111/j.1542-4774.2012.01078.x
Publication status	Published - Oct 2012

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

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ECON Microeconomic Theory

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title = "Categorize then choose: Boundedly rational choice and welfare",

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.",

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AB - 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.

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Categorize then choose: Boundedly rational choice and welfare

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