The number of boundedly rational choices on four elements

Area of Science:

• Decision Sciences
• Cognitive Science
• Behavioral Economics

Background:

• Bounded rationality models explain deviations from perfect economic rationality.
• Analyzing choices on small sets is crucial for understanding decision-making heuristics.
• Existing methods may not efficiently quantify choices explainable by specific bounded rationality models.

Purpose of the Study:

• To develop a combinatorial approach for identifying and quantifying choices consistent with bounded rationality models.
• To create a computational tool for analyzing choice experiments involving four-element sets.
• To establish a flexible methodology extendable to various bounded rationality models.

Main Methods:

• Utilized a combinatorial approach to enumerate non-isomorphic choices.
• Applied algorithmic methods to compute the number of choices justifiable by selected bounded rationality models.
• Focused on sets with four elements as a foundational case study.

Main Results:

• Successfully identified and computed the number of non-isomorphic choices explainable by several bounded rationality models.
• Developed an algorithm to estimate the fraction of choices justifiable by these models on finite sets.
• Demonstrated the utility of the approach for analyzing choice experiments.

Conclusions:

• The combinatorial methodology provides a robust framework for analyzing bounded rationality.
• The developed algorithm serves as a practical tool for researchers in choice experiments.
• The approach is adaptable for evaluating a wide range of existing and future bounded rationality models.