Asymmetric Dominance, Deferral and Status Quo Bias in a Theory of Choice with Incomplete Preferences

Gerasimou, Georgios (2012): Asymmetric Dominance, Deferral and Status Quo Bias in a Theory of Choice with Incomplete Preferences.

Abstract

This paper proposes a model of individual choice that does not assume completeness of the decision maker's preferences. The model helps explain in a natural way, and within a unied framework of choice in the presence of preference-incomparable options, three distinct behavioural phenomena: the asymmetric dominance/attraction effect, choice deferral and status quo bias. A decision maker who follows the decision rule featured in the model chooses an alternative from a menu if it is totally preference-undominated in that menu and at the same time is also partially preference-dominant. In situations where the decision maker's preferences are complete the model delivers strict utility maximisation.

• Item Type: MPRA Paper
• Language: English
• Keywords: Attraction Effect; Choice Deferral; Status Quo Bias; Incomplete Preferences; Bounded Rationality
• Subjects: D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles; D - Microeconomics > D1 - Household Behavior and Family Economics > D11 - Consumer Economics: Theory; D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles

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