Dynamic choice under familiarity-based attention

Barokas, Guy

doi:10.1007/s00355-021-01335-w

Cited by 1 publication

(1 citation statement)

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“…That is, the highlighted options are promoted over the non-highlighted options. Note that Example 3 can also capture the familiarity-based attention model [26] if f ∈ F is interpreted as a set of options the agent is familiar with. However, our theory does not subsume all frame-sensitive limited attention models.…”

Section: Our Theory Includes Example 3 Formentioning

confidence: 99%

Impressionable Rational Choice: Revealed-Preference Theory with Framing Effects

Barokas

Ünveren

2022

Mathematics

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Revealed preference is one of the most influential ideas in economics. It is, however, not clear how it can be generally applied in cases where agents’ choices depend on arbitrary changes in the decision environment. In this paper, we propose a generalization of the classic rational choice theory that allows for such framing effects. Frames are modeled as different presentations (e.g., visual or conceptual) of the alternatives that may affect choice. Our main premise is that framing effects are neutral (i.e., independent of labeling the alternatives). An agent exhibiting these neutral framing effects who is otherwise rational, is called impressionable rational. We show that our theory encompasses many familiar behavioral models such as status-quo bias, satisficing, present bias, framing effects resulting from indecisiveness, certain forms of limited attention, categorization bias, and the salience theory of choice, as well as hybrid models. Moreover, in all these models, sufficiently rich choice data allow our theory to identify the “correct” underlying preferences without invoking each specific cognitive process. Additionally, we introduce a falsifiable axiom that completely characterizes the behavior of agents who are impressionable rational.

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Section: Our Theory Includes Example 3 Formentioning

confidence: 99%