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Indifference, indecisiveness, experimentation and stochastic choice

Author

Listed:
  • Ok, Efe A.

    (Department of Economics and the Courant Institute of Mathematical Sciences, New York University)

  • Tserenjigmid, Gerelt

    (Department of Economics, University of California Santa Cruz)

Abstract

Among the reasons behind the choice behavior of an individual taking a stochastic form are her potential indifference or indecisiveness between certain alternatives, and/or her willingness to experiment in the sense of occasionally deviating from choosing a best alternative in order to give a try to other options. We introduce methods of identifying if, and when, a stochastic choice model may be thought of as arising due to any one of these three reasons. Each of these methods furnishes a natural way of making deterministic welfare comparisons within any model that is rationalized as such. In turn, we apply these methods, and characterize the associated welfare orderings, in the case of several well-known classes of stochastic choice models.

Suggested Citation

  • Ok, Efe A. & Tserenjigmid, Gerelt, 2022. "Indifference, indecisiveness, experimentation and stochastic choice," Theoretical Economics, Econometric Society, vol. 17(2), May.
    • Handle: RePEc:the:publsh:4216
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    References listed on IDEAS

    as
    1. Marina Agranov & Pietro Ortoleva, 2017. "Stochastic Choice and Preferences for Randomization," Journal of Political Economy, University of Chicago Press, vol. 125(1), pages 40-68.
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    Cited by:

    1. Yohan Pelosse, 2024. "A Non-Cooperative Shapley Value Representation of Luce Contests Success Functions," Working Papers 2024-01, Swansea University, School of Management.
    2. Gorno, Leandro & Rivello, Alessandro T., 2023. "A maximum theorem for incomplete preferences," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    3. Efe A. Ok & Gerelt Tserenjigmid, 2023. "Measuring Stochastic Rationality," Papers 2303.08202, arXiv.org, revised Dec 2023.
    4. Yoram Halevy & David Walker-Jones & Lanny Zrill, 2023. "Difficult Decisions," Working Papers tecipa-753, University of Toronto, Department of Economics.

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    More about this item

    Keywords

    Stochastic choice; indifference; incomplete preferences; experimentation; the general Luce model; random utility; additive perturbed utility; individual welfare;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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