Sequentially rationalizable choice with transitive rationales

Pak Hung Au, Keiichi Kawai

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)

Abstract

In this note, we analyze a sequentially rationalizable choice model with a transitive rationale and a standard preference. The model in this note is more restrictive than the Rational Shortlist Method (RSM) model which is proposed in Manzini and Mariotti (2007) to capture cyclic behavior. Yet, a decision maker in our model exhibits cyclic behavior in general. We prove that the cyclicity of an indirectly revealed preference is exactly what distinguishes the RSM framework (a sequential choice model with a non-standard preference) from our transitive-RSM framework (a sequential choice model with a standard preference). We also provide a partial identification result on the representation.

Original languageEnglish
Pages (from-to)608-614
Number of pages7
JournalGames and Economic Behavior
Volume73
Issue number2
DOIs
Publication statusPublished - 2011 Nov
Externally publishedYes

Keywords

  • Rationalization
  • Sequentially rationalizable choice

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics

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