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Equilibrium in Justifiable Strategies: A Model of Reason-based Choice in Extensive-form Games

Review of Economic Studies 2002 69(3), 691-706
I explore the idea that people care about the justifiability of their decisions in the context of two-person extensive games. Each player justifies his strategy s with a belief b of the opponent's strategy which is consistent with the play path and maximally plausible (according to some exogenous criterion). We say that s is justifiable if against the ex post criticism that some other strategy s′ outperforms s against b, the player can argue that playing s′ would have exposed him to similar criticism in the opposite direction. Under a simplicity-based plausibility criterion, this concept implies systematic departures from maximizing behaviour in familiar games.

Rationalizing Choice Functions By Multiple Rationales

Econometrica 2002 70(6), 2481-2488
The paper presents a notion of rationalizing choice functions that violate the “Independence of Irrelevant Alternatives” axiom. A collection of linear orderings is said to provide a rationalization by multiple rationales for a choice function if the choice from any choice set can be rationalized by one of the orderings. We characterize a tight upper bound on the minimal number of orderings that is required to rationalize arbitrary choice functions, and calculate the minimal number for several specific choice procedures.