Revealing preference discovery: a chronological choice framework

Abstract

We propose a framework for the analysis of choice behaviour when the latter is made explicitly in chronological order. We relate this framework to the traditional choice theoretic setting from which the chronological aspect is absent, and compare it to other frameworks that extend this traditional setting. Then, we use this framework to analyse various models of preference discovery. We characterise, via simple revealed preference tests, several models that differ in terms of (1) the priors that the decision-maker holds about alternatives and (2) whether the decision-maker chooses period by period or uses her knowledge about future menus to inform her present choices. These results provide novel testable implications for the preference discovery process of myopic and forward-looking agents.