Decision Conflict, Power Logit, and the Deferral Outside Option

Georgios Gerasimou

Papers from arXiv.org

Abstract: Decision makers often opt for the deferral outside option when they find it difficult to make an active choice. Contrary to existing logit models with an outside option where the latter is assigned a fixed value exogenously, this paper introduces and studies a class of logit models where that option's value is menu-dependent, may be determined endogenously, and could be interpreted as proxying the varying degree of decision difficulty at different menus. We focus on the *power logit* special class of these models. We show that these explain some observed choice-deferral effects that are caused by hard decisions, including non-monotonic "roller-coaster" choice-overload phenomena that are regulated by the presence or absence of a clearly dominant feasible alternative. We illustrate the usability, novel insights and explanatory gains of the proposed framework for duopolistic modelling and empirical discrete choice analysis.

Date: 2020-08, Revised 2026-03
New Economics Papers: this item is included in nep-dcm and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2008.04229 Latest version (application/pdf)

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:arx:papers:2008.04229

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().