Satisficing and stochastic choice

Aguiar, Victor H.; Boccardi, Maria Jose; Dean, Mark

doi:10.1016/j.jet.2016.08.008

Cited by 37 publications

(19 citation statements)

References 14 publications

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“…In this sense, counting could be considered an objective measure of value. Because the line pixels in our experiment cardi, and Dean (2016), Caplin, Dean, and Leahy (2019), and Cattaneo et al (2020. 1 0 For example, see Caplin (2016) for an overview.…”

Section: Incentivized Induced Value Experiments With Imperfectly Perceived Objectsmentioning

confidence: 99%

Visual judgments of length in the economics laboratory: Are there brains in stochastic choice?

Duffy

Gussman

Smith

2021

Journal of Behavioral and Experimental Economics

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We design an induced value choice experiment where the objects are valued according to only a single attribute with a continuous measure. Subjects have an imperfect perception of the choice objects but can reduce their imperfect perception with cognitive e¤ort. Subjects are given a choice set involving several lines of various lengths and are told to select one of them. They strive to select the longest line because they are paid an amount that is increasing in the length of their selection. This "idealized" choice experiment produces a dataset that is uniquely suited to study apparently random choice. We also manipulate the available cognitive resources of the subjects by imposing either a high or low cognitive load. We …nd that both choices and the allocation of e¤ort are a¤ected by the material incentives in the choice problem and the available cognitive resources. We …nd evidence that optimal choices have shorter deliberation times than suboptimal choices, which is consistent with previous theoretical predictions. The distribution of errors can have signi…cant implications for the speci…cation of stochastic choice models. Speci…cations where errors have a Gumbel distribution appear to provide a better …t than those with a normal distribution. Despite that the cognitive load manipulation a¤ects both choice and search, it is notable that neither the Gumbel distribution results nor the relationship between optimal choice and deliberation time appear to be a¤ected by the available cognitive resources. This perhaps suggests that these results are general and persistent features of choice.

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Section: Incentivized Induced Value Experiments With Imperfectly Perceived Objectsmentioning

confidence: 99%

Visual judgments of length in the economics laboratory: Are there brains in stochastic choice?

Duffy

Gussman

Smith

2021

Journal of Behavioral and Experimental Economics

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“…The authority may also be surprised to hear that the gold standard concept of Hicksian complementarity is embedded in a rational utility maximisation framework. 1 1 It merits noting in this respect that goverments are more and more exposed to the idea that citizens are not necessarily fully rational utility maximisers. They are increasingly being advised by 'behavioural economics' units.…”

Section: Motivationmentioning

confidence: 99%

“…However, the recent wave of abstract works on stochastic choice (e.g. Aguiar, Boccardi and Dean [1], Brady and Rehbeck [10], Caplin and Dean [12], Echenique, Saito and Tserenjigmid [16], Gül, Natenzon and Pesendorfer [18], Manzini and Mariotti [20] among others) has highlighted a wide variety of possible 'choice errors' and choice procedures, and so a number of reasons why agents' behaviour might fail to be described by a logit model, and indeed even by the much larger class of RUMs. We take Behavioural Insights Unit established in 2012 as part of the New South Wales Premier and Cabinet's office.…”

Section: Motivationmentioning

confidence: 99%

“…In the logit model, we assume that each bundle σ 2 fxy, x, y, ?g has a 'systematic utility' u : fxy, x, y, ?g ! R ++ , and that σ is chosen with logit probability, namely p (u,λ) logit (σ) = e u σ /λ ∑ τ2fxy,x,y,?g e u τ /λ (1) where λ > 0 is a scaling factor (measuring the variance of the underlying Gumbel errors, see McFadden [21]). In this specification, purely random behaviour (i.e.…”

Section: From Behaviour To Psychology: Two Examples With the Correlatmentioning

confidence: 99%

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Stochastic Complementarity

Manzini

Mariotti

Ülkü

2018

The Economic Journal

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The Hicksian definition of complementarity and substitutability may not apply in contexts in which agents are not utility maximisers or where price or income variations, whether implicit or explicit, are not available. We look for tools to identify complementarity and substitutability satisfying the following criteria: they are behavioural (based only on observable choice data); model-free (valid whether the agent is rational or not); and they do not rely on price or income variation. We uncover a conflict between properties that any complementarity notion should intuitively possess. We discuss three different possible resolutions of the conflict. J.E.L. codes: D0.

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“…On the other hand, users may also have an indifferent preference for any of the satisficing routes (i.e., that satisfy (1)). This is adopted from the notions discussed in [32]. In this case, we consider the fact that all users sharing the same od pair have a similar indifference preference.…”

Section: Introductionmentioning

confidence: 99%

Effects of Users’ Bounded Rationality on a Traffic Network Performance: A Simulation Study

Batista

Zhao

Leclercq

2018

Journal of Advanced Transportation

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In this paper, we revisit the principle of bounded rationality applied to dynamic traffic assignment to evaluate its influences on network performance. We investigate the influence of different types of bounded rational user behavior on (i) route flows at equilibrium and (ii) network performance in terms of its internal, inflow, and outflow capacities. We consider the implementation of a bounded rational framework based on Monte Carlo simulation. A Lighthill-Whitham-Richards (LWR) mesoscopic traffic simulator is considered to calculate time-dependent route costs that account for congestion, spillback, and shock-wave effects. Network equilibrium is calculated using the Method of Successive Averages. As a benchmark, the results are compared against both Deterministic and Stochastic User Equilibrium. To model different types of bounded rational user behavior we consider two definitions of user search order (indifferent and strict preferences) and two settings of the indifference band. We also test the framework on a toy Braess network to gain insight into changes in the route flows at equilibrium for both search orders and increasing values of aspiration levels.

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Satisficing and stochastic choice

Cited by 37 publications

References 14 publications

Visual judgments of length in the economics laboratory: Are there brains in stochastic choice?

Visual judgments of length in the economics laboratory: Are there brains in stochastic choice?

Stochastic Complementarity

Effects of Users’ Bounded Rationality on a Traffic Network Performance: A Simulation Study

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