Identifying Rule-Based Rationality

Abstract The revealed preference methodology allows an observer to infer preferences from choices. This paper extends this fundamental idea by experimentally identifying the for basing choices on simple decision rules. Subjects not only make case-by-case portfolio allocations but also design a investment rule selecting portfolios. They then choose between these two modes additional set of problems. majority opt interface, and in most cases, that cannot be rationalized any utility function or accounted reductions time cognitive costs.