Marketing Papers
Document Type
Journal Article
Date of this Version
9-2006
Publication Source
Journal of Economic Literature
Volume
44
Issue
3
Start Page
631
Last Page
661
DOI
10.1257/jel.44.3.631
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.
Copyright/Permission Statement
Copyright © 2006 the American Economic Association.
Recommended Citation
Rieskamp, J., Busemeyer, J. R., & Mellers, B. (2006). Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice. Journal of Economic Literature, 44 (3), 631-661. http://dx.doi.org/10.1257/jel.44.3.631
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Date Posted: 15 June 2018
This document has been peer reviewed.