1

HW (part a)
Individual Choice: General Theory


1. Let X={a,b,c,d}. List all possible feasible sets. How many feasible sets are there (not
counting the empty set or feasible sets consisting of a single alternative)?

a) 9
b) 10
c) 11
d) 12
e) none of the above


2. Let the set of objects of choice be X={a,b,c}. Consider the following function C:

F C(F)
{a,b} {a,b}
{a,c} {a}
{b,c} {a}
{a,b,c} {a,b}

a) C is definitely a choice function.
b) C is definitely not a choice function.
c) We cannot tell based on the information that is provided whether C is a choice
function or not.


3. Let the set of objects of choice be X={a,b,c}. Consider the following choice function
C:

F C(F)
{a,b} {b}
{a,c} {a}
{b,c} {c}
{a,b,c} {c}

Show that C does not satisfy WARP. Which feasible sets F
1
and F
2
are involved in a
violation of WARP?

a) {a,b} and {a,c}
b) {a,c} and {b,c}
c) {a,b} and {a,b,c}
d) none of the above


4. Let the set of objects of choice be X={a,b,c}. Consider the following choice function
C:

F C(F)
2

{a,b} {b}
{a,c} {a}
{b,c} {b}
{a,b,c} {a}

Show that C does not satisfy WARP. Which feasible sets F
1
and F
2
are involved in a
violation of WARP?

a) {a,b} and {a,c}
b) {a,c} and {b,c}
c) {a,b} and {a,b,c}
d) none of the above


5. Consider the following potential job candidates, who differ only according to their IQ
and experience:

Candidate IQ Experience (years)
a 120 1
b 110 2
c 100 3

An employer, when choosing between two of these candidates, uses the following
rule: If the IQ difference is strictly greater than 10, choose the candidate with the
higher IQ; otherwise choose the candidate with more experience.

a) The employers choice function, C, satisifies WARP if C({a,b,c})={a}.
b) The employers choice function, C, satisifies WARP if C({a,b,c})={b}.
c) The employers choice function, C, satisifies WARP if C({a,b,c})={c}.
d) None of the above.


6. Consider the experiment presented in class about the subscription to the Economist. In
treatment 1, most people always choose Option A while, in treatment 2, much fewer
people choose Option A and most people go for Option C. This provides evidence for
a failure of WARP. Intuitively, what psychological factor induces people to choose
Option A much less frequently in treatment 2?


7. Whenever DM gets a computer pop-up, she goes with the default. Is this an instance
of framing?

a) No, because defaults in computer pop-ups can be viewed as a recommendation.
b) Yes, because a different default is just a different way of presenting the
alternatives.


8. Lets say there are two options A and B. Is there framing if the default affects choice
when there is a cost of switching from the default (say 1)?

3

a) Yes, because the cost of switching is irrelevant from the point of view of the
definition of framing.
b) No, because the feasible set is not the same if A is the default and if B is the
default.
c) The answer depends on whether WARP is violated.