Organizational theorists built their knowledge of decision making through a progressive critique of rational choice theory. Their positioning towards rationality, however, is at odds with the observation of rationality persistence in organizational life. This paper addresses this paradox. It...

This paper suggests a new explanation for the low level of annuitization, which is valid even if one assumes perfect markets. We show that, as soon there exists a positive bequest motive, sufficiently risk averse individuals should not purchase annuities. A model calibration accounting for...

We provide a revealed preference analysis of the transferable utility hypothesis, which is widely used in economic models. First, we establish revealed preference conditions that must be satisfied for observed group behavior to be consistent with Pareto efficiency under transferable utility....

We examine how retailers discount the prices of product systems versus their constituent components. The topic is important because such systems are ubiquitous in our daily lives. In particular, many high-tech markets revolve around complex multi-component systems – e.g. a camera system...

This paper studies a class of multi-self decision-making models proposed in economics, psychology, and marketing. In this class, choices arise from the set-dependent aggregation of a collection of utility functions, where the aggregation procedure satisfies some simple properties. We propose a...

We present a method for evaluating the welfare of a decision maker, based on observed choice data. Unlike the standard economic theory of revealed preference, our method can be used whether or not the observed choices are rational. Paralleling the standard theory we present a model for choice...

As video games become more popular the extent to which they can and should be considered addictive has become controversial. I adapt the classic Becker-Murphy model of rational addiction for video games and apply it to a micro-data panel collected from the online video game Team Fortress 2. I...

Assuming that agents' preferences satisfy first-order stochastic dominance, we show how the Expected Utility paradigm can rationalize all optimal investment choices: the optimal investment strategy in any behavioral law-invariant (state-independent) setting corresponds to the optimum for an...

Examining rationality of expenditures and analyzing welfare changes are interrelated because welfare change analysis is predicated on “rational” (i.e., expenditure-minimizing) responses to price and income changes. This study examined Philippine family demands for (1) electricity, (2) gas...

The study tries to recognize the behaviour of the consumer with respect to the opportunity cost and marginal benefit associated with the commodity. The research tries to evaluate the factors and identify behavioural traits of consumers if they exist in decision making. The study also tries to...