State dependent choice

Paola Manzini, Marco Mariotti

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    1 Citation (Scopus)
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    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
    Early online date22 Apr 2015
    DOIs
    Publication statusPublished - Sept 2015

    Keywords

    • Bounded rationality
    • Procedural rationality
    • Utility maximization
    • Choice Behavior

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