The standard revealed preference argument relies on an implicit assumption that a decision maker considers all feasible alternatives. However, the marketing and psychology literatures provide well-established evidence that consumers do not consider all brands in a given market before making a purchase (Limited Attention). In this paper, we illustrate how one can deduce both the decision maker’s...

Considering markets with nonpivotal buyers, we analyze the anticompetitive effects of breakup fees used by an incumbent facing a more efficient entrant in the future. Buyers differ in their intrinsic switching costs. Breakup fees are profitably used to foreclose entry, regardless of the entrant’s efficiency advantage or level of switching costs. Banning breakup fees is beneficial to consumers. ...

Theorem 1 Suppose X is a smooth toric Fano 4-fold. Then X admits a totally nondegenerate abelian surface if X = P4, if X = P1 × P3 (type B4), or if X is a product of two smooth toric Del Pezzo surfaces (i.e. of type C4, D13, H8, L7, L8, L9, Q10, Q11, K4, U5, S2 × S2, S2 × S3 or S3 × S3). Otherwise there is no such embedding, unless possibly X is of type C3, D7, D10, D11, D14, D17, D18, G3, G4, ...

In decision-making involving multiple criteria or attributes, the attributes are often divided into core and non-core attributes. A dominance principle is formulated in terms of core attributes, and this principle is applied whenever it is applicable. If, however, the dominance principle defined in terms of core attributes is not applicable, then non-core attributes are consulted in comparing o...

Yearly sales of “fair trade” products exceeds $2.3 billion worldwide. Consumers who are altruistic and rational will choose these product-donation bundles when the bundle is cheaper than its elements. Assume a supplier’s investment reduces retailers’ costs (or improves quality), but this investment is non-verifiable, hence sub-optimal even with infinitely-repeated interaction. A retailer paying...

Motivated by real life decision problems, we model a boundedly rational choice procedure, called choice by iterative elimination, where an alternative might not be compared by all available alternatives. Our decision maker continues her limited search until she finds an alternative which is optimal within its consideration set. We study properties of this procure and provide a full characteriza...

We examine the maximal-element rationalizability of choice functions with arbitrary domains. While rationality formulated in terms of the choice of greatest elements according to a rationalizing relation has been analyzed relatively thoroughly in the earlier literature, this is not the case for maximal-element rationalizability, except when it coincides with greatest-element rationalizability b...

This study compares individual preferences across incentives (i.e., hypothetical vs. real incentives) and over time (i.e. elicitation at two different points in time) in a choice experiment involving charitable donating decisions. We provide evidence of hypothetical bias but little evidence of instability of individual giving. There is significant heterogeneity in individual preferences, with r...

The economics of happiness is applied to further the understanding of important consumption decisions in which limited willpower is often argued to lead to suboptimal choices. Based on individuals’ judgments of the quality of their lives, it is, in principle, possible to derive whether some observed behavior is suboptimal and is therefore reducing a person’s welfare. We discuss the key characte...