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Random consideration and choice: A case study of “default” options

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  • Horan, Sean

Abstract

A growing number of stochastic choice models include a “default” option for situations where the decision maker selects none of the feasible alternatives. While this is a welcome development, these models also present an empirical challenge—since it may be difficult to observe situations where the decision-maker chooses nothing. Taking Manzini and Mariotti’s (2014) independent random consideration model as a point of departure, I investigate what can be learned about models of choice with default when the no-choice behavior of the decision-maker is unobservable.

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  • Horan, Sean, 2019. "Random consideration and choice: A case study of “default” options," Mathematical Social Sciences, Elsevier, vol. 102(C), pages 73-84.
    • Handle: RePEc:eee:matsoc:v:102:y:2019:i:c:p:73-84
    DOI: 10.1016/j.mathsocsci.2019.09.006
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    References listed on IDEAS

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    1. Paola Manzini & Marco Mariotti, 2014. "Stochastic Choice and Consideration Sets," Econometrica, Econometric Society, vol. 82(3), pages 1153-1176, May.
    2. Dhar, Ravi, 1997. "Consumer Preference for a No-Choice Option," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(2), pages 215-231, September.
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    4. Richard L. Brady & John Rehbeck, 2016. "Menu‐Dependent Stochastic Feasibility," Econometrica, Econometric Society, vol. 84, pages 1203-1223, May.
    5. Aguiar, Victor H., 2017. "Random categorization and bounded rationality," Economics Letters, Elsevier, vol. 159(C), pages 46-52.
    6. Echenique, Federico & Saito, Kota & Tserenjigmid, Gerelt, 2018. "The perception-adjusted Luce model," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 67-76.
    7. Clark, Stephen A., 1995. "Indecisive choice theory," Mathematical Social Sciences, Elsevier, vol. 30(2), pages 155-170, October.
    8. Suck, Reinhard, 2002. "Independent random utility representations," Mathematical Social Sciences, Elsevier, vol. 43(3), pages 371-389, July.
    9. Georgios Gerasimou, 2018. "Indecisiveness, Undesirability and Overload Revealed Through Rational Choice Deferral," Economic Journal, Royal Economic Society, vol. 128(614), pages 2450-2479, September.
    10. Marley, A. A. J., 1991. "Context dependent probabilistic choice models based on measures of binary advantage," Mathematical Social Sciences, Elsevier, vol. 21(3), pages 201-231, June.
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    Citations

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    Cited by:

    1. Demirkan, Yusufcan & Kimya, Mert, 2020. "Hazard rate, stochastic choice and consideration sets," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 142-150.
    2. Victor H. Aguiar & Maria Jose Boccardi & Nail Kashaev & Jeongbin Kim, 2023. "Random utility and limited consideration," Quantitative Economics, Econometric Society, vol. 14(1), pages 71-116, January.
    3. Kovach, Matthew & Suleymanov, Elchin, 2023. "Reference dependence and random attention," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 421-441.
    4. Nail Kashaev & Natalia Lazzati, 2019. "Peer Effects in Random Consideration Sets," Papers 1904.06742, arXiv.org, revised May 2021.
    5. Kashaev, Nail & Aguiar, Victor H., 2022. "A random attention and utility model," Journal of Economic Theory, Elsevier, vol. 204(C).
    6. Georgios Gerasimou, 2020. "The Decision-Conflict Logit," Papers 2008.04229, arXiv.org, revised Aug 2023.
    7. Valentino Dardanoni & Paola Manzini & Marco Mariotti & Christopher J. Tyson, 2020. "Inferring Cognitive Heterogeneity From Aggregate Choices," Econometrica, Econometric Society, vol. 88(3), pages 1269-1296, May.
    8. Gibbard, Peter, 2021. "Disentangling preferences and limited attention: Random-utility models with consideration sets," Journal of Mathematical Economics, Elsevier, vol. 94(C).
    9. Yegane, Ece, 2022. "Stochastic choice with limited memory," Journal of Economic Theory, Elsevier, vol. 205(C).

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    More about this item

    Keywords

    Random consideration; Random utility; Default; No-choice;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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