Stochastic Choice and Consideration Sets

Paola Manzini and Marco Mariotti

No 6905, IZA Discussion Papers from Institute of Labor Economics (IZA)

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. Both the preference and the attention parameters are identified uniquely by stochastic choice data. The model is the only one for which the impact of removing any alternative a on the choice probability of any other alternative b is non-negative, asymmetric (either a impacts b or vice-versa), menu independent, neutral (the same on any alternative in the menu), and consistent with the impacts on a and b by a common third alternative.

Keywords: revealed preferences; consideration sets; logit model; random utility; discrete choice; bounded rationality (search for similar items in EconPapers)
JEL-codes: D0 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2012-10
New Economics Papers: this item is included in nep-dcm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published - revised version published in: Econometrica, 2014, 82 (3), 1153–1176

Downloads: (external link)
https://docs.iza.org/dp6905.pdf (application/pdf)

Related works:
Journal Article: Stochastic Choice and Consideration Sets (2014)
Working Paper: Stochastic Choice and Consideration Sets (2013)
Working Paper: Stochastic Choice and Consideration Sets (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp6905

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().