A discrete symmetry of a preference relation is a mapping from the domain of choice to itself under which preference comparisons are invariant; a continuous symmetry is a one-parameter family of such transformations that includes the identity; and a symmetry field is a vector field whose trajectories generate a continuous symmetry. Any continuous symmetry of a preference relation implies that i...

Individuals with identical preferences each receive a signal about the unknown state of the world and decide upon a utility-maximizing recommendation on the basis of that signal. The group makes a decision that maximizes a common utility function assuming perfect pooling of the information in individual signals. An action profile is a group action and a recommendation from each individual. A co...

A theory of decision making is proposed that supplies an axiomatic basis for the concept of “satisficing” postulated by Herbert Simon. After a detailed review of classical results that characterize several varieties of preference-maximizing choice behavior, the axiomatization proceeds by weakening the inter-menu contraction consistency condition involved in these characterizations. This exercis...

We consider agents who choose by proceeding through a checklist of criteria (for any pair of alternatives the …rst criterion that ranks the pair determines the agent’s choice). Regardless of the discriminating capacity of the criteria in a checklist, choices that maximize complete and transitive preferences can always be the outcome of a ‘quick’checklist that uses a small number of criteria. Fo...

In this paper we utilise data from a unique new birth-cohort study to see how the risk preferences of young people are affected by cognitive skills and gender. We find that cognitive ability (measured by the percentile ranking for university entrance at age 18) has no effect on risk preferences measured at age 20. This is in contrast to experimental studies that use IQ measures to proxy cogniti...

Truth-Telling: A Representative Assessment A central assumption of the canonical cheap talk literature is that people misreport their private information if this is to their material benefit. Recent evidence from laboratory experiments with student subjects suggests, however, that while many people do report the payoff-maximizing outcome, some report their private information truthfully or at l...

The recent financial crisis has shown that the reforming in regulation and supervision is essential. This paper studies whether banking regulation improves bank soundness or more regulation lead to decrease soundness of banking. Specifically, countries which require banks to report regularly and accurately their financial data to regulators and market participants have sounder banks. In th...

To achieve e¢ ciency, an agent who uses criteria to make choice decisions should employ the coarse criteria that have a small number of categories. Coarse criteria reduce decision-making cost even though an agent, to maintain the number of choice distinctions, must use more criteria. The most e¢ cient criteria are binary with two categories each; this result holds even if the marginal cost of u...

We consider two-stage “shortlisting procedures” in which the menu of alternatives is first pruned by some process or criterion and then a binary relation is maximized. Given a particular first-stage process, our main result supplies a necessary and sufficient condition for choice data to be consistent with a procedure in the designated class. This result applies to any class of procedures with ...

Cognitive Skills, Gender and Risk Preferences In this paper we utilise data from a unique new birth‐cohort study to see how the risk preferences of young people are affected by cognitive skills and gender. We find that cognitive ability (measured by the percentile ranking for university entrance at age 18) has no effect on risk preferences measured at age 20. This is in contrast to experimental...