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Random Consideration and Choice : A Case Study of "Default" Options

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  • Sean HORAN

Abstract

A growing number of stochastic choice models include a “default” option for situations where the decision maker selects none of the feasible alternatives. While this is a welcome development, these models also present an empirical challenge—since the situations where the decision-maker chooses nothing may be difficult to observe. Taking Manzini and Mariotti’s (2014) independent random consideration model as a point of departure, I investigate what can be learned about models of choice with default when the no-choice behavior of the decision-maker is unobservable.

Suggested Citation

  • Sean HORAN, 2018. "Random Consideration and Choice : A Case Study of "Default" Options," Cahiers de recherche 26-2018, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    • Handle: RePEc:mtl:montec:26-2018
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    References listed on IDEAS

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    1. Clark, Stephen A., 1995. "Indecisive choice theory," Mathematical Social Sciences, Elsevier, vol. 30(2), pages 155-170, October.
    2. Paola Manzini & Marco Mariotti, 2014. "Stochastic Choice and Consideration Sets," Econometrica, Econometric Society, vol. 82(3), pages 1153-1176, May.
    3. Dhar, Ravi, 1997. "Consumer Preference for a No-Choice Option," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 24(2), pages 215-231, September.
    4. Suck, Reinhard, 2002. "Independent random utility representations," Mathematical Social Sciences, Elsevier, vol. 43(3), pages 371-389, July.
    5. Aguiar, Victor H., 2017. "Random categorization and bounded rationality," Economics Letters, Elsevier, vol. 159(C), pages 46-52.
    6. Georgios Gerasimou, 2018. "Indecisiveness, Undesirability and Overload Revealed Through Rational Choice Deferral," Economic Journal, Royal Economic Society, vol. 128(614), pages 2450-2479, September.
    7. David Revelt & Kenneth Train, 1998. "Mixed Logit With Repeated Choices: Households' Choices Of Appliance Efficiency Level," The Review of Economics and Statistics, MIT Press, vol. 80(4), pages 647-657, November.
    8. Richard L. Brady & John Rehbeck, 2016. "Menu‐Dependent Stochastic Feasibility," Econometrica, Econometric Society, vol. 84, pages 1203-1223, May.
    9. Echenique, Federico & Saito, Kota & Tserenjigmid, Gerelt, 2018. "The perception-adjusted Luce model," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 67-76.
    10. Marley, A. A. J., 1991. "Context dependent probabilistic choice models based on measures of binary advantage," Mathematical Social Sciences, Elsevier, vol. 21(3), pages 201-231, June.
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    Citations

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    Cited by:

    1. Demirkan, Yusufcan & Kimya, Mert, 2020. "Hazard rate, stochastic choice and consideration sets," Journal of Mathematical Economics, Elsevier, vol. 87(C), pages 142-150.
    2. Victor H. Aguiar & Maria Jose Boccardi & Nail Kashaev & Jeongbin Kim, 2023. "Random utility and limited consideration," Quantitative Economics, Econometric Society, vol. 14(1), pages 71-116, January.
    3. Kovach, Matthew & Suleymanov, Elchin, 2023. "Reference dependence and random attention," Journal of Economic Behavior & Organization, Elsevier, vol. 215(C), pages 421-441.
    4. Yegane, Ece, 2022. "Stochastic choice with limited memory," Journal of Economic Theory, Elsevier, vol. 205(C).
    5. Nail Kashaev & Natalia Lazzati, 2019. "Peer Effects in Random Consideration Sets," Papers 1904.06742, arXiv.org, revised May 2021.
    6. Kashaev, Nail & Aguiar, Victor H., 2022. "A random attention and utility model," Journal of Economic Theory, Elsevier, vol. 204(C).
    7. Georgios Gerasimou, 2020. "Decision Conflict, Logit, and the Outside Option," Papers 2008.04229, arXiv.org, revised Nov 2024.
    8. Valentino Dardanoni & Paola Manzini & Marco Mariotti & Christopher J. Tyson, 2020. "Inferring Cognitive Heterogeneity From Aggregate Choices," Econometrica, Econometric Society, vol. 88(3), pages 1269-1296, May.
    9. Gibbard, Peter, 2021. "Disentangling preferences and limited attention: Random-utility models with consideration sets," Journal of Mathematical Economics, Elsevier, vol. 94(C).

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    More about this item

    Keywords

    random consideration; random utility; default; no-choice;
    All these keywords.

    JEL classification:

    • C44 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Operations Research; Statistical Decision Theory
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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