Stochastic choice and consideration sets

Paola Manzini; Marco Mariotti

Stochastic choice and consideration sets

Paola Manzini, Marco Mariotti

Research output: Working paper

Abstract

We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability,the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identified uniquely by stochastic choice data.

Original language	English
Publisher	University of St Andrews
Number of pages	34
Publication status	Published - Mar 2013

Publication series

Name	School of Economics & Finance Discussion Paper
Publisher	University of St Andrews
No.	1303
ISSN (Print)	0962-4031
ISSN (Electronic)	2055-303X

Keywords

Discrete choice
Random utility
Logit model
Luce model
Consideration sets
Bounded rationality
Revealed preferences

Access to Document

Manzini EconDisPap 1303
(c) the author 2013
Accepted author manuscript, 324 KB

Cite this

@techreport{cec322115b0a4c52b65011c45b804b13,

title = "Stochastic choice and consideration sets",

abstract = "We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability,the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identified uniquely by stochastic choice data.",

keywords = "Discrete choice, Random utility, Logit model, Luce model, Consideration sets, Bounded rationality, Revealed preferences",

author = "Paola Manzini and Marco Mariotti",

note = "Forthcoming in Econometrica",

year = "2013",

month = mar,

language = "English",

series = "School of Economics & Finance Discussion Paper",

publisher = "University of St Andrews",

number = "1303",

type = "WorkingPaper",

institution = "University of St Andrews",

}

TY - UNPB

T1 - Stochastic choice and consideration sets

AU - Manzini, Paola

AU - Mariotti, Marco

N1 - Forthcoming in Econometrica

PY - 2013/3

Y1 - 2013/3

N2 - We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability,the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identified uniquely by stochastic choice data.

AB - We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability,the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identified uniquely by stochastic choice data.

KW - Discrete choice

KW - Random utility

KW - Logit model

KW - Luce model

KW - Consideration sets

KW - Bounded rationality

KW - Revealed preferences

UR - http://ideas.repec.org/p/san/wpecon/1303.html

M3 - Working paper

T3 - School of Economics & Finance Discussion Paper

BT - Stochastic choice and consideration sets

PB - University of St Andrews

ER -

Stochastic choice and consideration sets

Abstract

Publication series

Keywords

Access to Document

Other files and links

Fingerprint

CHOICE WITH ERRORS: Choice with Errors

Cite this

Stochastic choice and consideration sets

Abstract

Publication series

Keywords

Access to Document

Other files and links

Fingerprint

Projects

CHOICE WITH ERRORS: Choice with Errors

Cite this