State dependent choice

Paola Manzini, Marco Mariotti*

*Corresponding author for this work

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

Abstract

We propose a theory of choices that are influenced by the psychological state of the agent. The central hypothesis is that the psychological state controls the urgency of the attributes sought by the decision maker in the available alternatives. While state dependent choice is less restricted than rational choice, our model does have empirical content, expressed by simple ‘revealed preference’ type of constraints on observable choice data. We demonstrate the applicability of simple versions of the framework to economic contexts. We show in particular that it can explain widely researched anomalies in the labour supply of taxi drivers.

Original languageEnglish
Pages (from-to)239-268
Number of pages30
JournalSocial Choice and Welfare
Volume45
Issue number2
DOIs
Publication statusPublished - 24 Sep 2015

Bibliographical note

Publisher Copyright:
© 2015, Springer-Verlag Berlin Heidelberg.

Copyright:
Copyright 2017 Elsevier B.V., All rights reserved.

Keywords

  • D01

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