Theory seminar presented by Paola Manzini (U of Sussex)

Abstract
Theories of bounded rationality often assume a rich dataset of choices from many overlapping menus, limiting their practical applicability. In contrast, we study the problem of identifying the distribution of cognitive characteristics in a population ofagentsfromaminimaldatasetthatconsistsofaggregatechoicesharesfromasingle menu, and includes no observable covariates of any kind. With homogeneous preferences, we find that “consideration capacity” and “consideration probability”distributionscanbothberecoveredeffectivelyifthemenuissufficientlylarge. This remains true generically when tastes are heterogeneous but their distribution isknown. Whenthepreferencedistributionisunknown,weshowthatjointchoice sharedatafromthree“occasions”aregenericallysufficientforfullidentificationof the cognitive distribution, and also provide substantial information about tastes.

Paper is available

here.

here.