Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice

Loading...
Thumbnail Image
Penn collection
Marketing Papers
Degree type
Discipline
Subject
Behavioral Economics
Business
Cognition and Perception
Cognitive Psychology
Marketing
Funder
Grant number
License
Copyright date
Distributor
Related resources
Author
Rieskamp, Jörg
Busemeyer, Jerome R
Mellers, Barbara
Contributor
Abstract

Most economists define rationality in terms of consistency principles. These principles place "bounds" on rationality—bounds that range from perfect consistency to weak stochastic transitivity. Several decades of research on preferential choice has demonstrated how and when people violate these bounds. Many of these violations are interconnected and reflect systematic behavioral principles. We discuss the robustness of thes violations and review the theories that are able to predict them. We further discuss the adaptive functions of the violations. From this perspective, choices do more than reveal preferences; they also reflect subtle, yet often quite reasonable, dependencies on the environment.

Advisor
Date Range for Data Collection (Start Date)
Date Range for Data Collection (End Date)
Digital Object Identifier
Series name and number
Publication date
2006-09-01
Journal title
Journal of Economic Literature
Volume number
Issue number
Publisher
Publisher DOI
Journal Issue
Comments
Recommended citation
Collection