Context-Dependent Choice as Explained by Foraging Theory

29 Pages Posted: 10 Nov 2015 Last revised: 25 Jan 2018

See all articles by Shengwu Li

Shengwu Li

Harvard University - Society of Fellows

Ning Neil Yu

Nanjing Audit University - Institute for Social and Economic Research

Date Written: February 2, 2016

Abstract

An agent makes consumption choices in multiple periods. Choice objects vary in type and quality; objects of the same type are inter-temporal substitutes. The current choice set is informative about the distribution over future choice sets. Thus, the presence of unchosen alternatives may rationally alter the agent's choice. Under some simple assumptions, the optimal policy exhibits context-dependent choice behavior, such as the decoy effect and choice overload.

Keywords: Decoy effect, Choice overload, Foraging theory, Consumer choice, Dynamic stochastic choice model, Monotone comparative statics

JEL Classification: D11, D83, D90, M31

Suggested Citation

Li, Shengwu and Yu, Ning Neil, Context-Dependent Choice as Explained by Foraging Theory (February 2, 2016). Available at SSRN: https://ssrn.com/abstract=2687279 or http://dx.doi.org/10.2139/ssrn.2687279

Shengwu Li

Harvard University - Society of Fellows ( email )

Cambridge, MA
United States

Ning Neil Yu (Contact Author)

Nanjing Audit University - Institute for Social and Economic Research ( email )

Stanford, CA 94305
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
583
Abstract Views
2,764
rank
57,490
PlumX Metrics