Conferences at Department of Economics, University of Toronto, Canadian Economic Theory Conference 2011

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Sequential Search and Choice from Lists

Sean Horan*

Date: 2011-05-14 2:00 pm – 2:30 pm
Last modified: 2011-04-09

Abstract


Decision-makers frequently encounter choice alternatives presented in the form of a list. A wealth of evidence shows that decision-making in the list environment is influenced by the order of the alternatives. The prevailing view in psychology and marketing is that these order effects in choice result from cognitive bias. In this paper, I offer a standard economic rationale for order effects. Taking an axiomatic approach, I model choice from lists as a process of sequential search (with and without recall). The characterization of these models provides choice-theoretic foundations for sequential search and recall. The list-structure of the environment permits a natural definition of search and preference in terms of choice. For a decision-maker whose behavior can be represented as the outcome of sequential search, the search strategy can be determined uniquely.