Modeling bounded rationality in choice behavior: Relative utility vs. random regret models

To better understand individuals’ decision behavior, bounded rational decision models are getting increasingly more attention. This paper reviews relative utility and random regret models, which both assert that the performance of the considered alternative is dependent on the attributes of one or more foregone alternatives in the choice set. This property of the models is called context dependency. Differences and similarities between the models are outlined, new developments and applications are presented and finally future improvements are discussed