Abstract:
We extend the swaps index of rationality, introduced by Apesteguia and Ballester (2015) for a finite set of alternatives, to the standard infinite consumer choice setting in which other rationality indices are typically defined. We show that the swaps approach recovers the decision-maker's true preference from choice data for a class of behavioral models that satisfy a monotonicity condition. We also derive methods to compute the swaps index and swaps preferences for real-world data sets.
