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Multiple discrete choice and quantity with order statistic marginal utilities

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  • Webster, Scott

Abstract

This paper presents a random utility maximization model for individuals selecting discrete quantities from a set of n alternatives. Multiple alternatives with positive quantities may be selected. Diminishing marginal utility to quantity of each alternative is modeled via order statistics of independent Gumbel random variables. The model is parsimonious and tractable, admitting closed-form expressions for choice probabilities. As such, the model is amenable to maximum likelihood estimation of structural parameters from observed choices.

Suggested Citation

  • Webster, Scott, 2023. "Multiple discrete choice and quantity with order statistic marginal utilities," Journal of choice modelling, Elsevier, vol. 46(C).
    • Handle: RePEc:eee:eejocm:v:46:y:2023:i:c:s1755534522000525
    DOI: 10.1016/j.jocm.2022.100395
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    References listed on IDEAS

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    4. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521766555, January.
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