Reason-Based Rationalization

We introduce a “reason-based” way of rationalizing an agent’s choice behaviour, which explains choices by specifying which properties of the options or choice context the agent cares about (the “motivationally salient properties”) and how he or she cares about these properties (the “fundamental preference relation”). Reason-based rationalizations can explain non-classical choice behaviour, including boundedly rational and sophisticated rational behaviour, and predict choices in unobserved contexts, an issue neglected in standard choice theory. We characterize the behavioural implications of di↵erent reason-based models and distinguish two kinds of contextdependent motivation: “context-variant” motivation, where the agent cares about di↵erent properties in di↵erent contexts, and “context-regarding” motivation, where the agent cares not only about properties of the options, but also about properties relating to the context.