Debreu’s choice model

Pavlo R. Blavatskyy ()
Additional contact information
Pavlo R. Blavatskyy: Montpellier Business School

Theory and Decision, 2024, vol. 96, issue 2, No 5, 297-310

Abstract: Abstract Debreu (American Economic Review 50:186–188, 1960) famously criticized Luce (Individual choice behavior, Wiley, New York, 1959) choice model with what became known as the red-bus blue-bus example: if a choice set contains two distinct alternatives C (car) and B (blue bus) then adding a third alternative A (red bus) that is essentially identical to B does not affect the choice probability of C but reduces the choice probability of B by half. Debreu’s critique highlights the existence of substitution effects violating the principle of independence from irrelevant alternatives—the cornerstone of Luce (Individual choice behavior, Wiley, New York, 1959) choice model. This paper weakens this principle to construct a model of probabilistic choice satisfying Debreu’s critique.

Keywords: Probabilistic choice; Debreu’s critique; Red-bus blue-bus example; Independence from irrelevant alternatives; Choice axiom (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s11238-023-09947-7 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
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:kap:theord:v:96:y:2024:i:2:d:10.1007_s11238-023-09947-7

Ordering information: This journal article can be ordered from
http://www.springer. ... ry/journal/11238/PS2

DOI: 10.1007/s11238-023-09947-7

Access Statistics for this article

Theory and Decision is currently edited by Mohammed Abdellaoui

More articles in Theory and Decision from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().