Impressionable Rational Choice: Revealed-Preference Theory with Framing Effects

Revealed preference is one of the most influential ideas in economics. It is, however, not clear how it can be generally applied cases where agents’ choices depend on arbitrary changes decision environment. In this paper, we propose a generalization classic rational choice theory that allows for such framing effects. Frames are modeled as different presentations (e.g., visual or conceptual) alternatives may affect choice. Our main premise effects neutral (i.e., independent labeling alternatives). An agent exhibiting these who otherwise rational, called impressionable rational. We show our encompasses many familiar behavioral models status-quo bias, satisficing, present resulting from indecisiveness, certain forms limited attention, categorization and salience choice, well hybrid models. Moreover, all models, sufficiently rich data allow to identify “correct” underlying preferences without invoking each specific cognitive process. Additionally, introduce falsifiable axiom completely characterizes behavior agents