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Gradual pairwise comparison and stochastic choice

Author

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  • Dutta, Rohan

    (Department of Economics, McGill University)

Abstract

Guided by evidence from eye-tracking studies of choice, pairwise comparison is assumed to be the building block of the decision-making procedure. A decision-maker with a rational preference may nevertheless consider the constituent pairwise comparisons gradually, easier comparisons preceding difficult ones. Facing a choice problem she may be unable to complete all relevant comparisons and choose with equal odds from alternatives not found inferior. Stochastic choice data consistent with such behaviour is characterized and used to infer the underlying preference relation and the order of pairwise comparisons. The choice procedure offers a novel rationale for behavioural phenomena such as the similarity effect and violations of stochastic transitivity and regularity.

Suggested Citation

  • Dutta, Rohan, 2020. "Gradual pairwise comparison and stochastic choice," Theoretical Economics, Econometric Society, vol. 15(4), November.
    • Handle: RePEc:the:publsh:3647
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    References listed on IDEAS

    as
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    Cited by:

    1. Kremena Valkanova, 2024. "Markov Stochastic Choice," Papers 2410.22001, arXiv.org.
    2. Bhavook Bhardwaj & Kriti Manocha, 2021. "Choice by Rejection," Papers 2108.07424, arXiv.org.

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    More about this item

    Keywords

    Bounded rationality; revealed preference; stochastic choice;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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