Endogenous Rational Shortlist Method

This paper endogenizes the rational short-list method whereby the decision-maker consecutively uses two rationales to finalize her choice. Rather than being exogenously given, it is assumed that choice alternatives themselves induce them. We use a novel inductive decomposition of the weak axiom of revealed preferences (WARP) to characterize this model. The decomposition connects every set of alternatives to the collection of all its subsets lacking only one element. It is shown that by simply relaxing a single "leg" of the decomposition between the doubleton and tripletons, one may characterize the endogenous rational shortlist method