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

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  • Gerasimou, Georgios

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.

Suggested Citation

  • Gerasimou, Georgios, 2012. "Asymmetric Dominance, Deferral and Status Quo Bias in a Theory of Choice with Incomplete Preferences," MPRA Paper 40097, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:40097
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    File URL: https://mpra.ub.uni-muenchen.de/40097/1/MPRA_paper_40097.pdf
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Georgios Gerasimou, 2016. "Partially dominant choice," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 61(1), pages 127-145, January.
    2. Mark Dean & Ozgur Kibris & Yusufcan Masatlioglu, 2014. "Limited Attention and Status Quo Bias," Working Papers 2014-11, Brown University, Department of Economics.
    3. Sürücü, Oktay, 2016. "Welfare improving discrimination based on cognitive limitations," Research in Economics, Elsevier, vol. 70(4), pages 608-622.

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    More about this item

    Keywords

    Attraction Effect; Choice Deferral; Status Quo Bias; Incomplete Preferences; Bounded Rationality;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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