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Cognitive Constraints, Contraction Consistency, and the Satisficing Criterion

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  • Christopher J. Tyson

    (Queen Mary, University of London)

Abstract

A theory of decision making is proposed that offers an axiomatic basis for the notion of "satisficing" postulated by Herbert Simon. The theory relaxes the standard assumption that the decision maker always fully perceives his preferences among the available alternatives, requiring instead that his ability to perceive any given preference be decreasing with respect to the complexity of the choice problem at hand. When complexity is aligned with set inclusion, this exercise is shown to be equivalent to abandoning the contraction consistency axiom of classical choice theory.

Suggested Citation

  • Christopher J. Tyson, 2007. "Cognitive Constraints, Contraction Consistency, and the Satisficing Criterion," Working Papers 614, Queen Mary University of London, School of Economics and Finance.
    • Handle: RePEc:qmw:qmwecw:614
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    References listed on IDEAS

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    More about this item

    Keywords

    Choice function; Perception; Revealed preference; Threshold;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General

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