Categorize then choose: boundedly rational choice and welfare
journal contribution
posted on 2023-06-09, 08:41authored byPaola Manzini, Marco Mariotti
We propose a boundedly rational model of choice where agents categorize alternatives before choosing. The model explains some behavioral anomalies, and it is fully characterized by a property of choice data: a categorizer can never exhibit certain patterns of “revealed preference reversals”. This model offers clues on the problem of making welfare judgements in the presence of boundedly rational agents.