MICRO/THEORY: Bounded Rationality is Rare; Professor Alfio Giarlotta (University of Catania)

Abstract

Most bounded rationality properties in the literature are inherited by subchoices, but are not satisfied by at least one subchoice of most choice functions. Therefore the fraction of choice functions that can be explained by these models goes to zero as the number of items tends to infinity. Numerical estimates confirm the rarity of bounded rationality for all these models even for small sets of alternatives.

Click here to view paper.