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Stochastic choice and consideration sets

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Author(s)

Paola Manzini, Marco Mariotti

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Abstract

We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability, the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives. We show that this random choice rule is the only one for which the impact of removing an alternative on the choice probability of any other alternative is asymmetric and menu independent. Both the preference relation and the attention parameters are identified uniquely by stochastic choice data.
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Original languageEnglish
Pages (from-to)1153-1176
Number of pages24
JournalEconometrica
Volume89
Issue number3
Early online date2 Jun 2013
DOIs
StatePublished - 2014

    Research areas

  • Discrete choice, Random utility, Logit model, Luce model, Consideration sets, Bounded rationality, Revealed preferences

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