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Inferential Choice Theory

Author

Listed:
  • Narayanaswamy Balakrishnan

    (McMaster University)

  • Efe A. Ok

    (New York University)

  • Pietro Ortoleva

    (Princeton University)

Abstract

Despite being the fundamental primitive of the study of decision-making in economics, choice correspondences are not observable: even for a single menu of options, we observe at most one choice of an individual at a given point in time, as opposed to the set of all choices she deems most desirable in that menu. However, it may be possible to observe a person choose from a feasible menu at various times, repeatedly. We propose a method of inferring the choice correspondence of an individual from this sort of choice data. First, we derive our method axiomatically, assuming an ideal dataset. Next, we develop statistical techniques to implement this method for real-world situations where the sample at hand is often fairly small. As an application, we use the data of two famed choice experiments from the literature to infer the choice correspondences of the participating subjects.

Suggested Citation

  • Narayanaswamy Balakrishnan & Efe A. Ok & Pietro Ortoleva, 2021. "Inferential Choice Theory," Working Papers 2021-60, Princeton University. Economics Department..
    • Handle: RePEc:pri:econom:2021-60
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    References listed on IDEAS

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    Cited by:

    1. Elias Bouacida, 2021. "Identifying Choice Correspondences," Working Papers 327800275, Lancaster University Management School, Economics Department.
    2. Rêgo, Leandro Chaves & Kilgour, D. Marc, 2022. "Choice stabilities in the graph model for conflict resolution," European Journal of Operational Research, Elsevier, vol. 301(3), pages 1064-1071.

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    More about this item

    Keywords

    Choice Correspondences; Estimation; Stochastic Choice Functions; Transitivity of Preferences;
    All these keywords.

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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