Choice by Iterative Search
Yusufcan Masatlioglu and Daisuke Nakajima ,
3
( 8 )
Theoretical Economics
701–728
September
2013
Abstract

When making choices, decision makers often either lack information about alternatives or lack the cognitive capacity to analyze every alternative. To capture these situations, we formulate a framework to study behavioral search by utilizing the idea of consideration sets. Consumers engage in a dynamic search process. At each stage, they consider only those options in the current consideration set. We provide behavioral postulates that characterize this model. We illustrate how one can identify both search paths and preferences.

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