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Context-Dependent Heterogeneous Preferences: A Comment on Barseghyan and Molinari (2023)

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  • Cattaneo, Matias D
  • Ma, Xinwei
  • Masatlioglu, Yusufcan

Abstract

Barseghyan and Molinari give sufficient conditions for semi-nonparametric point identification of parameters of interest in a mixture model of decision-making under risk, allowing for unobserved heterogeneity in utility functions and limited consideration. A key assumption in the model is that the heterogeneity of risk preferences is unobservable but context-independent. In this comment, we build on their insights and present identification results in a setting where the risk preferences are allowed to be context-dependent.
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Suggested Citation

  • Cattaneo, Matias D & Ma, Xinwei & Masatlioglu, Yusufcan, 2023. "Context-Dependent Heterogeneous Preferences: A Comment on Barseghyan and Molinari (2023)," University of California at San Diego, Economics Working Paper Series qt3f7644vj, Department of Economics, UC San Diego.
    • Handle: RePEc:cdl:ucsdec:qt3f7644vj
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    References listed on IDEAS

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    1. Levon Barseghyan & Francesca Molinari & Matthew Thirkettle, 2021. "Discrete Choice under Risk with Limited Consideration," American Economic Review, American Economic Association, vol. 111(6), pages 1972-2006, June.
    2. Levon Barseghyan & Francesca Molinari, 2023. "Risk Preference Types, Limited Consideration, and Welfare," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 41(4), pages 1011-1029, October.
    3. Tversky, Amos & Kahneman, Daniel, 1992. "Advances in Prospect Theory: Cumulative Representation of Uncertainty," Journal of Risk and Uncertainty, Springer, vol. 5(4), pages 297-323, October.
    4. Harry Markowitz, 1952. "The Utility of Wealth," Journal of Political Economy, University of Chicago Press, vol. 60(2), pages 151-151.
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