# Ordinal Relative Satisficing Behavior

Working paper

Series:

Barcelona GSE

Year:

2014

We propose a notion of r-rationality, based on the idea that the
choices of individuals are guided by a single preference order, but rather than
always choosing the very best available alternative, agents are content with
selecting one of the r-best. This proposal provides a purely ordinal and relative
version of the classical idea of satis
cing behavior. No level of satisfaction
is exogenously fixed, agents are not full maximizers, but they follow a clear
pattern of behavior whose consequences generate testable implications, which
we fully characterize. The notion of r-rationalizability is further extended to
individuals whose ordinal satisficing level may vary depending on the set of
available alternatives: a similar characterization obtains. Since any choice
function F is n-rationalizable, we can ask for the minimal r(F) for which F
is r(F)-rationalizable, and take that value as a measure of the agent´s degree
of rationality. We provide an algorithm to compute it for any given F. Special
cases of ordinal relative satisficing behavior are shown to result from a variety
of choice models proposed in the literature. Our notion allows for further
flexibility, yet still provides precise restrictions on observable data.