We develop an extension of Luce's random choice model to study violations of the weak axiom of revealed preference. We introduce the notion of a stochastic preference and show that it implies the Luce model. Then, to address well‐known difficulties of the Luce model, we define the attribute...

We introduce a notion of coarse competitive equilibrium (CCE), to study households' inability to tailor their consumption to the state of the economy. Our notion is motivated by limited cognitive ability (in particular attention, memory, and complexity) and it maintains the complete market...

We analyse preferences over finite decision problems in order to model decision-makers with "changing tastes". we provide conditions on these preferences that identify the Strotz model of consistent planning. building on an example given by <xref ref-type="bibr" rid="R8">Peleg and Yaari (1973)</xref>, we show that for problems with...

A behavioral competitive equilibrium restricts households ability to tailor their consumption to the state of the economy. Compared to standard competitive equilibrium, a behavioral competitive equilibrium yields more consumption risk and extreme price volatility when the realized output is near...

We introduce and analyze expected uncertain utility (EUU) theory. A prior and an interval utility characterize an EUU decision maker. The decision maker transforms each uncertain prospect into an interval‐valued prospect that assigns an interval of prizes to each state. She then ranks...

This paper comments on "On the Potential of Neuroeconomics: A Critical (but Hopeful) Appraisal" by B. Douglas Beinheim (JEL D01, D87)

We provide a time consistent model that addresses the preference reversals that motivate the time inconsistency literature. The model subsumes the behavior generated by the time-inconsistency approach in finite settings but, unlike the time-inconsistent models, allows for self-control. This...