Probabilistic Choice as a Result of Mistakes

Lars-Göran Mattsson and Jörgen Weibull

No 544, Working Paper Series from Research Institute of Industrial Economics

Abstract: We derive a family of probabilistic choice models including the multinomial logit model, from a microeconomic model in which the decision maker has to make some effort in order to avoid mistakes when implementing any desired outcome. The disutility of this effort enters the decision maker's goal function in an additively separable way. A particular disutility function, yielding the multinomial logit and GEV models as special cases, is characterized axiomatically. Unlike the usual random-utility approach, the present approach leads to a normalization of the achieved utility with respect to the number of alternatives. The present model also applies to continuum choice sets in Euclidean spaces, and provides a microeconomic foundation for quantal response models in game theory.

Keywords: Choice; Decision Theory; Mistakes (search for similar items in EconPapers)
JEL-codes: D11 D60 D81 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2000-12-20
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Citations: View citations in EconPapers (1)

Published in Games and Economic Behaviour, 2002, pages 61-78.

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0544

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