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Cluster-shortlisted choice

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  • Kops, Christopher

Abstract

Clustering is an essential part of data analysis and a natural simplifying operation to perform when making choices in complex situations. It is the act of grouping similar objects together. This paper develops an individual choice theory based on the idea of clustering. It shows that two simple conditions behaviorally characterize this theory and lays out to what degree its parameters can be identified from choice data. It furthermore presents an attempt at a taxonomy of some of the most prominent models in the literature on two-step conceptualizations of the act of choice.

Suggested Citation

  • Kops, Christopher, 2022. "Cluster-shortlisted choice," Journal of Mathematical Economics, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:mateco:v:102:y:2022:i:c:s0304406822000660
    DOI: 10.1016/j.jmateco.2022.102726
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    References listed on IDEAS

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    More about this item

    Keywords

    Clustering; Bounded rationality; Consideration sets; Contraction consistency; Expansion consistency; Chernoff condition;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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