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Modeling the Choice of Choice Set in Discrete-Choice Random-Utility Models

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  • J L Horowitz

    (Departments of Geography and Economics, The University of Iowa, Iowa City, IA 52242, USA)

Abstract

In conventional random-utility models, such as the multinomial logit model, it is assumed that a decisionmaker's choice set is independent of his or her preferences conditional on the explanatory variables of the models. However, there are many situations in which the decisionmaker chooses the choice set, thereby making the independence assumption implausible. For example, if information about alternatives is costly, an individual may choose to learn in detail about only a small group of them. This paper is concerned with the modeling of discrete choice with endogenous choice sets. It is assumed that costly information forces the decisionmaker to acquire detailed knowledge of only a small group of alternatives that she or he selects. Models are developed for choice-set generation in this context and for choice conditional on endogenous choice sets.

Suggested Citation

  • J L Horowitz, 1991. "Modeling the Choice of Choice Set in Discrete-Choice Random-Utility Models," Environment and Planning A, , vol. 23(9), pages 1237-1246, September.
    • Handle: RePEc:sae:envira:v:23:y:1991:i:9:p:1237-1246
    DOI: 10.1068/a231237
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    References listed on IDEAS

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    1. McFadden, Daniel, 1989. "A Method of Simulated Moments for Estimation of Discrete Response Models without Numerical Integration," Econometrica, Econometric Society, vol. 57(5), pages 995-1026, September.
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    Cited by:

    1. Brian Jacob & Brian McCall & Kevin Stange, 2018. "College as Country Club: Do Colleges Cater to Students’ Preferences for Consumption?," Journal of Labor Economics, University of Chicago Press, vol. 36(2), pages 309-348.
    2. Yamamoto, Toshiyuki & Li, Cheng & Morikawa, Takayuki, 2014. "An empirical analysis of the factors raising the interest in new shopping destinations," Journal of Retailing and Consumer Services, Elsevier, vol. 21(6), pages 950-957.
    3. Sigal Kaplan & Shlomo Bekhor & Yoram Shiftan, 2011. "Development and estimation of a semi-compensatory residential choice model based on explicit choice protocols," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 47(1), pages 51-80, August.
    4. Domanski, Adam, 2009. "Estimating Mixed Logit Recreation Demand Models With Large Choice Sets," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49413, Agricultural and Applied Economics Association.
    5. Jordan Louviere & Kenneth Train & Moshe Ben-Akiva & Chandra Bhat & David Brownstone & Trudy Cameron & Richard Carson & J. Deshazo & Denzil Fiebig & William Greene & David Hensher & Donald Waldman, 2005. "Recent Progress on Endogeneity in Choice Modeling," Marketing Letters, Springer, vol. 16(3), pages 255-265, December.

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