Deliberately Stochastic

Simone Cerreia-Vioglio, David Dillenberger, Pietro Ortoleva and Gil Riella

American Economic Review, 2019, vol. 109, issue 7, 2425-45

Abstract: We study stochastic choice as the outcome of deliberate randomization. We derive a general representation of a stochastic choice function where stochasticity allows the agent to achieve from any set the maximal element according to her underlying preferences over lotteries. We show that in this model stochasticity in choice captures complementarity between elements in the set, and thus necessarily implies violations of Regularity/Monotonicity, one of the most common properties of stochastic choice. This feature separates our approach from other models, e.g., Random Utility.

JEL-codes: D80 D81 (search for similar items in EconPapers)
Date: 2019
Note: DOI: 10.1257/aer.20180688
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Citations: View citations in EconPapers (29)

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