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Theory and Decision
Published in: Theory and Decision 2/2016

29-05-2015

Asymmetric dominance, deferral, and status quo bias in a behavioral model of choice

Author: Georgios Gerasimou

Published in: Theory and Decision | Issue 2/2016

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Abstract

This paper proposes and axiomatically characterizes a model of choice that builds on the criterion of partial dominance and allows for two types of avoidant behavior: choice deferral and status quo bias. These phenomena are explained in a unified way that allows for a clear theoretical distinction between them to be made. The model also explains the strengthening of the attraction effect that has been observed when deferral is permissible. Unlike other models of status quo biased behavior, the one analyzed in this paper builds on a unique, reference-independent preference relation that is acyclic and generally incomplete. When this relation is complete, the model reduces to rational choice.
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Appendix
Available only for authorised users
Footnotes
1
The object \(\diamond \) is defined as something not belonging to X in Masatlioglu and Ok (2005). This minor difference in the two definitions is unimportant mathematically.
 
2
Other interpretations have been adopted in the literature. For instance, Masatlioglu and Ok (2015) call \((A,\diamond )\) a problem without a status quo and (A, s) a problem with a status quo.
 
3
This is so because the relation \(\succ \) is acyclic. Thus, if (1a) is not satisfied in \((A,\diamond )\), it must be because \(x\nsucc y\) for all \(x,y\in A\).
 
4
Property \(\gamma \) is also commonly referred to as “Expansion” in the literature.
 
5
Evidence for this effect was first reported in Iyengar and Lepper (2000).
 
6
However, Ok et al. (2015) do analyze a model of choice in which certain feasible alternatives act as endogenous reference points that influence behavior by restricting the set of options over which the agent is maximizing his utility function.
 
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Metadata
Title
Asymmetric dominance, deferral, and status quo bias in a behavioral model of choice
Author
Georgios Gerasimou
Publication date
29-05-2015
Publisher
Springer US
Published in
Theory and Decision / Issue 2/2016
Print ISSN: 0040-5833
Electronic ISSN: 1573-7187
DOI
https://doi.org/10.1007/s11238-015-9499-7

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