We recover approximate parametric preferences from consistent and inconsistent consumer choices. The procedure seeks to utilize revealed preference information contained in choices by minimizing its ranking inconsistency with the proposed parametric preferences. We provide a novel...

The heterogeneous connections model is a generalization of the homogeneous connections model of Jackson and Wolinsky (1996) in which the intrinsic value of each connection is set by a discrete, positive and symmetric function that depends solely on the types of the two end agents. Core periphery...

In many circumstances, evaluations are based on empirical data. However, some observations may be imprecise, meaning that it is not entirely clear what occurred in them. We address the question of how beliefs are formed in these situations. The individual in our model is essentially a...

This paper provides a description of a possible mental process individuals go through in their attempt to comprehend stated probabilities in simple lotteries. The evaluation of probabilities is based on the following main components: lotteries encountered in the past, the realizations of these...

People reason about real-estate prices both in terms of general rules and in terms of analogies to similar cases. We propose to examine empirically which mode of reasoning fits the data better. To this end, we develop the statistical techniques required for the estimation of the case-based...

People reason about real-estate prices both in terms of general rules and in terms of analogies to similar cases. We propose to empirically test which mode of reasoning fits the data better. To this end, we develop the statistical techniques required for the estimation of the case-based model....

We consider the dynamics of reasoning by general rules (theories) and specific cases (analogies). When an agent faces an exogenous process, we show that, under mild conditions, if reality happens to be simple, the agent will converge to adopt a theory and discard analogical thinking. If,...

We consider the dynamics of reasoning by general rules (theories) and by specific cases (analogies). When an agent faces an exogenous process, we show that, under mild conditions, if reality happens to be simple, the agent will converge to adopt a theory and discard analogical thinking. If,...

Pareto efficiency is not as compelling when people hold different beliefs as it is under common beliefs or certainty. In the present paper we propose to restrict the standard Pareto relation by imposing the following constraint: in order for one allocation to dominate another, all agents must...