Clustering is an essential part of data analysis and a natural simplifying operation to perform when making choices in complex situations. It is the act of grouping similar objects together. This paper develops an individual choice theory based on the idea of clustering. It shows that two simple conditions behaviorally characterize this theory and lays out to what degree its parameters can be identified from choice data. It furthermore presents an attempt at a taxonomy of some of the most prominent models in the literature on two-step conceptualizations of the act of choice.
|Number of pages||10|
|Journal||Journal of Mathematical Economics|
|Publication status||Published - Oct 2022|
- d01 - Microeconomic Behavior: Underlying Principles
- d11 - Consumer Economics: Theory
- d91 - "Intertemporal Consumer Choice; Life Cycle Models and Saving"
- bounded rationality
- CONSIDERATION SETS
- contraction consistency
- expansion consistency
- Chernoff condition