Multiple discrete choice and quantity with order statistic marginal utilities

Scott Webster

Journal of choice modelling, 2023, vol. 46, issue C

Abstract: This paper presents a random utility maximization model for individuals selecting discrete quantities from a set of n alternatives. Multiple alternatives with positive quantities may be selected. Diminishing marginal utility to quantity of each alternative is modeled via order statistics of independent Gumbel random variables. The model is parsimonious and tractable, admitting closed-form expressions for choice probabilities. As such, the model is amenable to maximum likelihood estimation of structural parameters from observed choices.

Keywords: Order statistics; Random utility maximization; Choice models (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eejocm:v:46:y:2023:i:c:s1755534522000525

DOI: 10.1016/j.jocm.2022.100395

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