Stochastic choice over menus

Pedram Heydari ()
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Pedram Heydari: Geisinger ADMI

Theory and Decision, 2020, vol. 88, issue 2, No 4, 257-268

Abstract: Abstract Models of choice over menus aim at capturing the effect of some behavioral or non-standard element of decision-making on the behavior of a single decision-maker. These models are usually compared with the standard model of choice over menus, in which the decision-maker chooses a menu whose best item is better than that of all other available ones. However, in many empirical settings such as experimental studies, choice data come from a population of decision-makers with possibly heterogeneous attitudes and tastes. This heterogeneity can make the observed choices over menus stochastic. This fact calls for a stochastic characterization of models of choice over menus to be able to better compare and contrast different models empirically. In this paper, I do this task for the standard model, which would be an extension of the random utility model to the realm of choice over menus. In particular, I provide the necessary and sufficient conditions, i.e., axioms on (stochastic) choice data over menus for it to be consistent with a population of decision-makers each of whom behaves according to the standard model. The axioms that characterize the model are the axiom of revealed stochastic preferences over singletons and three rationality axioms.

Keywords: Stochastic choice; Random utility; Dynamic choice; Menu (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11238-019-09723-6

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