Ordinal, relative. satisficing behavior

Seminari Theory-Experimental

Salvador Barberá (with A.Neme)

Universitat Autònoma de Barcelona

28-Oct-2016

Seminar 3 – 14:30

We propose a notion of r-rationality, a relative version of satisficing behavior based on the idea that, for any set of available alternatives, individuals choose one of their r-best according to a single preference. We fully characterize the choice functions satisfying the condition for any r, and provide an algorithm to compute the maximal degree of r-rationality associated with any given choice function. The notion is extended to individuals whose r may vary with the set of available alternatives. We provide experimental evidence that the predictive power of our theory, measured by Seltenís index, improves upon that of alternative ones.