Intertemporal Aggregation of Choice Data with Consumption Dependent Preferences

Christopher Turansick

Papers from arXiv.org

Abstract: We study consumption dependence in the context of random utility and repeated choice. We show that, in the presence of consumption dependence, the random utility model is a misspecified model of repeated rational choice. This misspecification leads to biased estimators and failures of standard random utility axioms. We characterize exactly when and by how much the random utility model is misspecified when utilities are consumption dependent.

Date: 2023-02, Revised 2025-09
New Economics Papers: this item is included in nep-dcm and nep-upt
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