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The focal Luce model with status Quo

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  • Makoto Hagiwara

    (Osaka University of Economics)

Abstract

We consider stochastic choice problems. The “attraction effect” is a commonly observed and attested behavioral bias in experimental and empirical studies. For stochastic choice problems, we propose a model incorporating this effect in addition to status quo bias and compromise effect, which we call the “Focal Luce Model with Status Quo” (FLM-SQ). In the FLM-SQ, the decision-maker is only drawn to alternatives that are better than the status quo alternative, and focal alternatives are relatively more likely to be chosen. We characterize the FLM-SQ in terms of four properties.

Suggested Citation

  • Makoto Hagiwara, 2024. "The focal Luce model with status Quo," Economic Theory Bulletin, Springer;Society for the Advancement of Economic Theory (SAET), vol. 12(1), pages 107-117, June.
    • Handle: RePEc:spr:etbull:v:12:y:2024:i:1:d:10.1007_s40505-024-00266-w
    DOI: 10.1007/s40505-024-00266-w
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    References listed on IDEAS

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