STOCHASTIC CHOICE AND CONSIDERATION SETS

Paola Manzini; Marco Mariotti

doi:10.3982/ECTA10575

STOCHASTIC CHOICE AND CONSIDERATION SETS

Paola Manzini^*, Marco Mariotti

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

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 maximizes 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
Pages (from-to)	1153-1176
Number of pages	24
Journal	Econometrica
Volume	82
Issue number	3
DOIs	https://doi.org/10.3982/ECTA10575
Publication status	Published - May 2014

Keywords

Discrete choice
random utility
logit model
Luce model
consideration sets
bounded rationality
revealed preferences
PROBABILISTIC CHOICE
PREFERENCE
RATIONALITY
ELIMINATION
ATTENTION
MODEL

Access to Document

10.3982/ECTA10575

Cite this

@article{a1e002938b584a15859a392ab2bb4853,

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 maximizes 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, PROBABILISTIC CHOICE, PREFERENCE, RATIONALITY, ELIMINATION, ATTENTION, MODEL",

author = "Paola Manzini and Marco Mariotti",

year = "2014",

month = may,

doi = "10.3982/ECTA10575",

language = "English",

volume = "82",

pages = "1153--1176",

journal = "Econometrica",

issn = "0012-9682",

publisher = "Wiley-Blackwell",

number = "3",

}

TY - JOUR

T1 - STOCHASTIC CHOICE AND CONSIDERATION SETS

AU - Manzini, Paola

AU - Mariotti, Marco

PY - 2014/5

Y1 - 2014/5

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 maximizes 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 maximizes 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

KW - PROBABILISTIC CHOICE

KW - PREFERENCE

KW - RATIONALITY

KW - ELIMINATION

KW - ATTENTION

KW - MODEL

U2 - 10.3982/ECTA10575

DO - 10.3982/ECTA10575

M3 - Article

SN - 0012-9682

VL - 82

SP - 1153

EP - 1176

JO - Econometrica

JF - Econometrica

IS - 3

ER -

STOCHASTIC CHOICE AND CONSIDERATION SETS

Abstract

Keywords

Access to Document

Fingerprint

Cite this