Deviations of rational choice: An integrative explanation of the endowment and several context effects

Joost Kruis*, Gunter Maris, Maarten Marsman, Maria Bolsinova, Han L. J. van der Maas

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

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Abstract

People's choices are often found to be inconsistent with the assumptions of rational choice theory. Over time, several probabilistic models have been proposed that account for such deviations from rationality. However, these models have become increasingly complex and are often limited to particular choice phenomena. Here we introduce a network approach that explains a broad set of choice phenomena. We demonstrate that this approach can be used to compare different choice theories and integrates several choice mechanisms from established models. A basic setup implements bounded rationality, loss aversion, and inhibition in a natural fashion, which allows us to predict the occurrence of well-known choice phenomena, such as the endowment effect and the similarity, attraction, compromise, and phantom context effects. Our results show that this network approach provides a simple representation of complex choice behaviour, and can be used to gain a better understanding of how the many choice phenomena and key theoretical principles from different types of decision-making are connected.

Original languageEnglish
Article number16226
Number of pages16
JournalScientific Reports
Volume10
Issue number1
DOIs
Publication statusPublished - 2020

Keywords

  • DECISION FIELD-THEORY
  • RESPONSE-TIME
  • ISING-MODEL
  • SIMILARITY
  • ALTERNATIVES
  • ATTRACTION
  • PROBABILITY
  • INHIBITION
  • JUDGMENT
  • NETWORK

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