Abstract
An individual displays various preference orderings in different payoff-irrelevant circumstances. It is assumed that the variation in the observed preference orderings is the outcome of some cognitive process that distorts the underlying preferences of the individual. We introduce a framework for eliciting the individual's underlying preferences in such cases and then demonstrate it for two cognitive processes-satisficing and small assessment errors.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 375-387 |
| Number of pages | 13 |
| Journal | Review of Economic Studies |
| Volume | 79 |
| Issue number | 1 |
| DOIs | |
| State | Published - Jan 1 2012 |
Funding
Acknowledgment. tnqdeleteWe thank Ayala Arad, Doug Bernheim, Eddie Dekel, Jerry Green, Daniel Hojman, Tim Feddersen, Drew Fudenberg, Yusufcan Masatlioglu, Meg Meyer, Ron Siegel, Ran Spiegler, Rakesh Vohra, two anonymous referees, and seminar participants at Boston University, Hebrew University, Harvard University, New York University, Northwestern University, University of British Columbia, the Summer School on Welfare Economics and Philosophy at San-Sebastian (Spain, July 2009), and the European Summer Symposium in Economic Theory at Gerzensee (Switzerland, July 2010) for their comments. Rubinstein acknowledges support from the Israeli Science Foundation (259/08) and from the Foerder Institute for Economic Research.
Keywords
- Behavioural data set
- Bounded rationality
- Preferences
- Welfare analysis
ASJC Scopus subject areas
- Economics and Econometrics