Categorize Then Choose: Boundedly Rational Choice and Welfare

Paola Manzini, Marco Mariotti

    Research output: Contribution to journalArticlepeer-review

    97 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
    JournalJournal of the European Economic Association
    Volume10
    Issue number5
    Early online date13 Jun 2012
    DOIs
    Publication statusPublished - Oct 2012

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