A search based analysis of decision making in simple allocation problems

Official URL: http://risc01.sabanciuniv.edu/record=b1630624 (Table of Contents)

In this thesis, we focus on the analysis of rationality for simple allocation problems by interpreting solution rules as data on the choices of a policy maker. For an inventory of bankruptcy rules, we show that only constrained equal awards rule satis�es contraction independence. In addition, we weaken the rationality axiom and formulate the weak WARP (Weak Axiom of Revealed Preferences) property for simple allocation problems. We conclude that among a class of well-known solutions to simple allocation problems, the constrained equal awards rule uniquely satis�es contraction independence and weak WARP. In order to see the implications of existence of behavioral constraints in making choice, we next construct a search based model in which the decision maker has to engage in a dynamic search to adjudicate the con�icting claims and chose a division. Finally, we show that all allocation rules can be rationalized with this simple search model.