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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. Clark, Stephen A., 1995. "Indecisive choice theory," Mathematical Social Sciences, Elsevier, vol. 30(2), pages 155-170, October.
    2. Paola Manzini & Marco Mariotti, 2014. "Stochastic Choice and Consideration Sets," Econometrica, Econometric Society, vol. 82(3), pages 1153-1176, May.
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    8. 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.
    9. Aguiar, Victor H., 2017. "Random categorization and bounded rationality," Economics Letters, Elsevier, vol. 159(C), pages 46-52.
    10. Echenique, Federico & Saito, Kota & Tserenjigmid, Gerelt, 2018. "The perception-adjusted Luce model," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 67-76.
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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. "Decision Conflict, Logit, and the Outside Option," Papers 2008.04229, arXiv.org, revised Nov 2024.
    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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