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IZA
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Rationalizing Boundedly Rational Choice: Sequential Rationalizability and Rational Shortlist Methods
by
Paola Manzini, Marco Mariotti
(August 2004)
published as "Sequentially Rationalizable Choice" in: American Economic Review, 2007, 97 (5), 1824-1839
Abstract:
A sequentially rationalizable choice function is a choice function which can be obtained by
applying sequentially a fixed set of asymmetric binary relations (rationales). A Rational
ShortlistMethod (RSM) is a choice function which is sequentially rationalizable by two
rationales. These concepts translate into economic language some human choice heuristics
studied in psychology. We provide a full characterization of RSMs and study some properties
of sequential rationalizability. These properties allow some degree of menu dependence in
choice.
Text: See Discussion Paper No. 1239
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