We address the oft-repeated criticism that the demands which the rational choice approach makes on the knowledge and cognition of a decision maker (DM) are way beyond the capabilities of typical human intelligence. Our key finding is that it may be possible to arrive at this ideal of rationality by means of cognitively less demanding, heuristicbased ecological reasoning that draws on information about others' choices in the DM's environment. Formally, we propose a choice procedure under which, in any choice problem, the DM, first, uses this information to shortlist a set of alternatives. The DM does this shortlisting by a mental process of categorization whereby she draws similarities with certain societal members-the ingroup-and distinctions from others-the outgroup-and considers those alternatives that are similar (dissimilar) to ingroup (outgroup) members' choices. Then, she chooses from this shortlisted set by applying her preferences, which may be incomplete owing to limitations of knowledge. We show that if a certain homophily condition connecting the DM's preferences with her ingroup-outgroup categorization holds, then the procedure never leads the DM to making bad choices. If, in addition, a certain shortlisting consistency condition holds visa -vis non-comparable alternatives under the DM's preferences, then the procedure results in rational choices.
We provide a new behavioral foundation for subjective expected utility (SEU) within the Anscombe-Aumann framework. In contrast to the original axiomatization of SEU, our behavioral foundation establishes that to be consistent with SEU maximization, we need not explicitly assume that preferences satisfy the independence axiom over the domain of all acts. Rather, the substantive implications of independence for an SEU representation may equivalently be derived from less demanding conditions over certain smaller classes of acts. These acts, which we refer to as uncertainty-free comparable acts, have the property that they are relatively simple for a decision maker to compare because she can rank acts within any such class based on her risk preferences alone, without having to consider the underlying uncertainty. Acts of this kind comprise constant acts and acts that are almost identical in the sense that they differ from one another in at most one state.
We address a common criticism directed toward models of expressive voting that they are ad hoc in nature. To that end, we propose a foundation for expressive behavior that is based on a novel theory of social preferences under risk. Under our proposal, expressive considerations in behavior arise from the particular way in which risky social prospects are assessed by decision‐makers who want to interpret their choices as moral. To illustrate the scope of our framework, we use it to address some key questions in the literature on expressive voting: why, for expressive considerations, might voters vote against their self‐interest in large elections and why might such elections exhibit a moral bias. Specifically, we consider an electoral set‐up with two alternatives and explain why, when the size of the electorate is large, voters may want to vote for the alternative they deem morally superior even if this alternative happens to be strictly less preferred, in an all‐inclusive sense, than the other. (JEL D01, D03, D81, D72, A13)
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