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Cognitive Constraints, Contraction Consistency, and the Satisficing Criterion
Tyson, Christopher J. - School of Economics and Finance, Queen Mary - 2007
A theory of decision making is proposed that offers an axiomatic basis for the notion of "satisficing" postulated by Herbert Simon. The theory relaxes the standard assumption that the decision maker always fully perceives his preferences among the available alternatives, requiring instead that...
Persistent link: https://www.econbiz.de/10005106333
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Monotone threshold representations
Frick, Mira - In: Theoretical economics : TE ; an open access journal in … 11 (2016) 3, pp. 757-772
\textit{monotone threshold representation}: There is an underlying rational benchmark, corresponding to maximization of a … quantified by a threshold map $\delta$, which is monotone with respect to set inclusion. We derive an axiomatic characterization … of the model, extending familiar characterizations of rational choice. We classify monotone threshold representations as …
Persistent link: https://www.econbiz.de/10011671902
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Monotone threshold representations
Frick, Mira - In: Theoretical Economics 11 (2016) 3, pp. 757-772
\textit{monotone threshold representation}: There is an underlying rational benchmark, corresponding to maximization of a … quantified by a threshold map $\delta$, which is monotone with respect to set inclusion. We derive an axiomatic characterization … of the model, extending familiar characterizations of rational choice. We classify monotone threshold representations as …
Persistent link: https://www.econbiz.de/10011599584
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Capital Risk : Precautionary and Excess Saving
Selden, Larry - 2018
Precautionary saving typically refers to the additional investment in a risk free asset when exogenous labor income is risky versus certain. When risky income results endogenously from the investment in a risky asset, the meaning and characterization of precautionary saving change and far less...
Persistent link: https://www.econbiz.de/10012929334
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Demand Tests for Expected Utility in Incomplete Markets
Kubler, Felix - 2016
Asset demand tests for Expected Utility have almost universally been implemented in contingent claim settings where markets are complete. However when markets are incomplete, these tests cannot be applied since contingent claim prices cannot be uniquely recovered from given asset prices and the...
Persistent link: https://www.econbiz.de/10012998148
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How Elementary is Diversification? A Study of Children's Portfolio Choice
De Giorgi, Enrico G. - 2017
Diversification is a fundamental concept in economics, decision theory, and finance, but the way in which it is implemented in the real world varies greatly. This paper asks how elementary the notion of diversification is by studying whether children apply it as a choice heuristic. We report on...
Persistent link: https://www.econbiz.de/10012949924
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Manipulation of choice behavior
Manzini, Paola; Mariotti, Marco; Tyson, Christopher J. - 2011
We introduce and study the problem of manipulation of choice behavior. In a class of two-stage models of decision making, with the agent's choices determined by three psychological variables, we imagine that a subset of these variables can be selected by a manipulator. To what extent does this...
Persistent link: https://www.econbiz.de/10010278596
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Manipulation of Choice Behavior
Manzini, Paola; Mariotti, Marco; Tyson, Christopher J. - Institute for the Study of Labor (IZA) - 2011
We introduce and study the problem of manipulation of choice behavior. In a class of two-stage models of decision making, with the agent's choices determined by three "psychological variables," we imagine that a subset of these variables can be selected by a "manipulator." To what extent does...
Persistent link: https://www.econbiz.de/10009225770
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Satisficing behavior with a secondary criterion
Tyson, Christopher J. - 2014
Using the techniques of revealed preference analysis, we study a two-stage model of choice behavior. In the first stage, the decision maker maximizes a menu-dependent binary relation encoding preferences that are imperfectly perceived. In the second, a menu-independent binary relation is...
Persistent link: https://www.econbiz.de/10010472896
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Choice, deferral, and consistency
Costa‐Gomes, Miguel A.; Cueva, Carlos; Gerasimou, Georgios - In: Quantitative economics : QE ; journal of the … 13 (2022) 3, pp. 1297-1318
We report on two novel choice experiments with real goods where subjects in one treatment are forced to choose, as is the norm in economic experiments, while in the other they are not but can instead incur a small cost to defer choice. Using a variety of measures, we find that the active choices...
Persistent link: https://www.econbiz.de/10013382078