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A General Behavioural Model of Random Choice

Author

Listed:
  • Paola Manzini
  • Marco Mariotti

Abstract

We develop and study a stochastic eliminative choice procedure, called choice by random checklist (CRC). On the one hand CRC extends the idea of Tversky's Elimination by Aspects (EBA) to explain, for example, stochastically intransitive choices. On the other hand a special case of CRC is equivalent to random utility maximisation (RUM). In this way we bring within a single formal framework two leading random choice models in economics and in psychology, which are otherwise difficult to relate. Unlike EBA, which is defined recursively, we give an explicit formula for the choice probabilites in a CRC. We show that a CRC satisfies Monotonicity (extending a result of Sattath and Tversky [14]). We define new testable properties, Stochastic WARP and the Probabilistic Inequality, that are satisfied by CRC (and so, in particular, by a RUM).

Suggested Citation

  • Paola Manzini & Marco Mariotti, 2011. "A General Behavioural Model of Random Choice," Carlo Alberto Notebooks 237, Collegio Carlo Alberto.
    • Handle: RePEc:cca:wpaper:237
    as

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    References listed on IDEAS

    as
    1. Barbera, Salvador & Pattanaik, Prasanta K, 1986. "Falmagne and the Rationalizability of Stochastic Choices in Terms of Random Orderings," Econometrica, Econometric Society, vol. 54(3), pages 707-715, May.
    2. Faruk Gul & Paulo Natenzon & Wolfgang Pesendorfer, 2014. "Random Choice as Behavioral Optimization," Econometrica, Econometric Society, vol. 82, pages 1873-1912, September.
    3. Daniel McFadden, 2001. "Economic Choices," American Economic Review, American Economic Association, vol. 91(3), pages 351-378, June.
    4. Mandler, Michael & Manzini, Paola & Mariotti, Marco, 2012. "A million answers to twenty questions: Choosing by checklist," Journal of Economic Theory, Elsevier, vol. 147(1), pages 71-92.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Random Utility Maximization; Elimination by Aspects; Eliminative heuristics;
    All these keywords.

    JEL classification:

    • D0 - Microeconomics - - General

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