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

Research output: Contribution to journal › Article › peer-review

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
Journal	Journal of the European Economic Association
Volume	10
Issue number	5
Early online date	13 Jun 2012
DOIs	https://doi.org/10.1111/j.1542-4774.2012.01078.x
Publication status	Published - Oct 2012

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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 {\textquotedblleft}revealed preference reversals{\textquotedblright}. This model offers clues on the problem of making welfare judgements in the presence of boundedly rational agents.",

author = "Paola Manzini and Marco Mariotti",

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Categorize Then Choose: Boundedly Rational Choice and Welfare

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