Economics at your fingertips  

Revisiting consistency with random utility maximisation: theory and implications for practical work

Stephane Hess (), Andrew Daly and Richard Batley
Additional contact information
Stephane Hess: University of Leeds
Andrew Daly: University of Leeds
Richard Batley: University of Leeds

Theory and Decision, 2018, vol. 84, issue 2, 181-204

Abstract: Abstract While the paradigm of utility maximisation has formed the basis of the majority of applications in discrete choice modelling for over 40 years, its core assumptions have been questioned by work in both behavioural economics and mathematical psychology as well as more recently by developments in the RUM-oriented choice modelling community. This paper reviews the basic properties with a view to explaining the historical pre-eminence of utility maximisation and addresses the question of what departures from the paradigm may be necessary or wise in order to accommodate richer behavioural patterns. We find that many, though not all, of the behavioural traits discussed in the literature can be approximated sufficiently closely by a random utility framework, allowing analysts to retain the many advantages that such an approach possesses.

Keywords: Random utility maximisation; RUM properties; Behavioural patterns; Discrete choice (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) 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:

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

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 ().

Page updated 2019-05-18
Handle: RePEc:kap:theord:v:84:y:2018:i:2:d:10.1007_s11238-017-9651-7