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Harmonic choice model

Author

Listed:
  • Pavlo R. Blavatskyy

    (Montpellier Business School)

Abstract

For decades, discrete choice modelling was practically dominated by only two models: multinomial probit and logit. This paper presents a novel alternative—harmonic choice model. It is qualitatively similar to multinomial probit and logit: if one choice alternative greatly exceeds all (falls below at least one of) other alternatives in terms of utility then it is chosen with probability close to one (zero). Compared to probit and logit, the new model has relatively flat tails and it is steeper in the neighborhood of zero (when all alternatives yield the same utility and the decision maker chooses among them at random).

Suggested Citation

  • Pavlo R. Blavatskyy, 2024. "Harmonic choice model," Theory and Decision, Springer, vol. 96(1), pages 49-69, February.
    • Handle: RePEc:kap:theord:v:96:y:2024:i:1:d:10.1007_s11238-023-09939-7
    DOI: 10.1007/s11238-023-09939-7
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    References listed on IDEAS

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