Choice deferral, indecisiveness and preference for flexibility

We introduce a model of menu choice in which a person’s psychological tastes and revealed preferences may be distinct. The former is modeled by means of a possibly incomplete (but otherwise rational) preference relation <, and the latter by a completion <∗ of that relation. The two relations are connected through an axiom which formalizes the following intuitive rule: “Whenever in doubt about which menu is better, don’t commit now; just leave options open.” The main result of this paper is that, under the usual assumptions of the menu choice literature, this deferral property alone forces <∗ to exhibit a preference for flexibility, thus giving credence to the proverb above. In particular, we find that there is a fundamental tension between non-monotonic preferences, such as preferences for self-control, and tendency to defer choice due to indecisiveness.