How Many Mechanisms? Measuring Parsimony in Risky Choice

Avner Seror

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arXiv · 2601.02964

How Many Mechanisms? Measuring Parsimony in Risky Choice

Avner Seror

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Abstract

Behavioral theories rest on parsimony: a small number of mechanisms organizing many decisions. We define a Maximum Rule Concentration Index that measures how parsimoniously a dataset of risky choices can be organized through a library of simple, parameter-free decision rules drawn from canonical behavioral theories: salience, regret, disappointment, modal-payoff focusing, extreme-outcome screening, and limited attention. Applied to three lottery-choice datasets, the data exhibit detectable parsimony: for a majority of subjects, observed concentration exceeds what standard utility models generate on the same menus. The concentration organizes around salience thinking, modal-payoff focusing, and regret.

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Avner Seror. 2026-01-06. How Many Mechanisms? Measuring Parsimony in Risky Choice. https://arxiv.org/abs/2601.02964

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