This paper analyses the behavior of an individual who wants to maximize his utility function, but he is not able to evaluate it. There are many ways to choose a single alternative from a given set. We show that a unique utility maximizing procedure exists. Choices induced by this optimal...

Guided by evidence from eye-tracking studies of choice, pairwise comparison is assumed to be the building block of the decision-making procedure. A decision-maker with a rational preference may nevertheless consider the constituent pairwise comparisons gradually, easier comparisons preceding...

Many intertemporal trade-offs are unbalanced: while the advantages of options are concentrated in a few periods, the disadvantages are dispersed over numerous periods. We provide novel experimental evidence for "concentration bias", the tendency to overweight advantages that are concentrated in...

Ambiguous prospects are ubiquitous in social and economic life, but the psychological foundations of behavior under ambiguity are still not well understood. One of the most robust empirical regularities is the strong correlation between attitudes towards ambiguity and compound risk which...

Ambiguous prospects are ubiquitous in social and economic life, but the psychological foundations of behavior under ambiguity are still not well understood. One of the most robust empirical regularities is the strong correlation between attitudes towards ambiguity and compound risk which...

Standard choice theory assumes that the choice set is known to the decision-maker in advance. In contrast, we develop a model in which alternatives are examined sequentially and decision-makers exhibit `satis cing' attitudes. The proposed procedure includes the standard model of choice as a...

How would a boundedly rational agent react to a larger menu? I model bounded rationality as choice from an unobservable, subjective consideration subset. Consideration sets satisfy Sen's (1969) property alpha: larger objective choice sets can generate smaller consideration sets. In a...

We propose a notion of r-rationality, a relative version of satisficing behavior based on the idea that, for any set of available alternatives, individuals choose one of their r-best according to a single preference. We fully characterize the choice functions satisfying the condition for any r,...

Many decision models in marketing science and psychology assume that a consumer chooses by proceeding sequentially through a checklist of desirable properties. These models are contrasted to the utility maximization model of rationality in economics. We show on the contrary that the two...

An agent wants to derive her belief over outcomes based on past observations collected in her database (memory). There is well establish evidence in the psychology and marketing literature that agents consistently fail (or choose not) to process all available information. An agent might be...