Stochastic Choice and Revealed Perturbed Utility
By Drew Fudenberg, Ryota Iijima, Tomasz Strzalecki. 2015
197 citations recorded by the source corpus.
Perturbed utility functions|the sum of expected utility and a non-linear perturbation function|provide a simple and tractable way to model various sorts of stochastic choice. We provide two easily understood conditions each of which characterizes this representation: One condition generalizes the acyclicity condition used in revealed preference theory, and the other generalizes Luce’s IIA condition. We relate the discrimination or selectivity of choice rules to properties of their associated perturbations, both across dierent agents and across decision problems. We also show that these representations correspond to a form of ambiguity-averse preferences for an agent who is uncertain about her true utility.
Subfields: Economics and Econometrics, General Decision Sciences, Safety Research
View Paper: https://www.semanticscholar.org/paper/001b6c6f1ce9e5de8dbba21bef5257fac4075b72
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Citations in the corpus
- Randomization and Ambiguity Aversion (2020, background): “In the context of social choice, the idea behind the monotonicity conditions in Gajdos and Maurin (2004) and Fleurbaey (2010) is similar to FOSD.”
- Stochastic Choice and Preferences for Randomization (2017, unknown): “…Orme (1994), Wu and Gonzalez (1996), Ratcliff and McKoon (2008),Wilcox (2011), Gul, Natenzon, and Pesendorfer (2014),Woodford (2014), Fudenberg and Strzalecki (2015), and Natenzon (2015); see also Johnson and Ratcliff (2013) for reviews. stochastic choice and preferences for randomization 47 in…”