CFDP 1670

Rationalizing Choice with Multi-Self Models

Author(s): 

Publication Date: June 2008

Update Date: July 2011May 2012

Pages: 41

Abstract: 

This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a method for characterizing the extent of irrationality in a choice behavior, and use this measure to provide a lower bound on the set of choice behaviors that can be rationalized with n utility functions. Under an additional assumption (scale-invariance), we show that generically at most five “reasons” are needed for every “mistake.”

Supplemental Material: Supplemental material

Keywords: 

Multi-self models, Index of irrationality, IIA violations, Rationalizability

JEL Classification Codes:  D11, D13, D71

See CFP: 1480