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Branching-independent random utility model

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  • Suleymanov, Elchin

Abstract

This paper introduces a subclass of the Random Utility Model (RUM), called branching-independent RUM. In this subclass, the probability distribution over the ordinal rankings of alternatives satisfies the following property: for any k∈{1,…,n−1}, where n denotes the number of alternatives, when fixing the first k and the last n−k alternatives, the relative rankings of the first k and the last n−k alternatives are independent. Branching-independence is motivated by the classical example due to Fishburn (1998), which illustrates the non-uniqueness problem in random utility models. Surprisingly, branching-independent RUM is characterized by the Block-Marschak condition, which also characterizes general RUM. In fact, I show that a construction similar to the one used in Falmagne (1978) generates a branching-independent RUM. In addition, within the class of branching-independent RUMs, the probability distribution over preferences is uniquely determined. Hence, while branching-independent RUM has the same explanatory power as general RUM, it is uniquely identified.

Suggested Citation

  • Suleymanov, Elchin, 2024. "Branching-independent random utility model," Journal of Economic Theory, Elsevier, vol. 220(C).
    • Handle: RePEc:eee:jetheo:v:220:y:2024:i:c:s0022053124000863
    DOI: 10.1016/j.jet.2024.105880
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    Cited by:

    1. Angelo Petralia, 2024. "Harmful choices," Papers 2408.01317, arXiv.org, revised Nov 2024.

    More about this item

    Keywords

    Stochastic choice; Random utility model;

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory

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