Irrational Random Utility Models

Daniele Caliari and Henrik Petri

Papers from arXiv.org

Abstract: We show that the set of aggregate choices of a population of rational decision-makers - random utility models (RUMs) - can be represented by a population of irrational ones if, and only if, their preferences are sufficiently uncorrelated. We call this representation: Irrational RUM. We then show that almost all RUMs can be represented by a population in which at least some decision-makers are irrational and that under specific conditions their irrational behavior is unconstrained.

Date: 2024-03
New Economics Papers: this item is included in nep-dcm, nep-mic and nep-upt
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