Choice by Iterative Elimination
نویسندگان
چکیده
Motivated by real life decision problems, we model a boundedly rational choice procedure, called choice by iterative elimination, where an alternative might not be compared by all available alternatives. Our decision maker continues her limited search until she finds an alternative which is optimal within its consideration set. We study properties of this procure and provide a full characterization. While our behavioral postulates enable the model to accommodate seemingly irrational behavior, such as the Attraction Effect and “less is more” phenomena, they rule out choice cycles. Moreover, we also identify preferences from a boundedly rational behavior to make welfare analysis possible. JEL Classification: D11, D81.
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