Theoretical Economics, Volume 7, Number 1 (January 2012)

Theoretical Economics 7 (2012), 1–23


Choice by lexicographic semiorders

Paola Manzini, Marco Mariotti

Abstract


In Tversky's (1969) model of a lexicographic semiorder, preference is generated by the sequential application of numerical criteria, by declaring an alternative x better than an alternative y if the first criterion that distinguishes between x and y ranks x higher than y by an amount exceeding a fixed threshold. We generalize this idea to a fully-fledged model of boundedly rational choice. We explore the connection with sequential rationalizability of choice (Apesteguia and Ballester 2009, Manzini and Mariotti 2007), and we provide axiomatic characterizations of both models in terms of observable choice data.

Keywords: Lexicographic semiorders, bounded rationality, revealed preference, choice

JEL classification: D0

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