Theoretical Economics 8 (2013), 701–728 1555-7561/20130701 Choice by iterative search

When making choices, decision makers often either lack information about al-ternatives or lack the cognitive capacity to analyze every alternative. To capture these situations, we formulate a framework to study behavioral search by utilizing the idea of consideration sets. Consumers engage in a dynamic search process. At each stage, they consider only those options in the current consideration set. We provide behavioral postulates that characterize this model. We illustrate how one can identify both search paths and preferences