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Stochastic representatitve agent

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Abstract

Consider the aggregation of a collection of individual stochastic behaviors that fit a given stochastic choice model. We say that such a model has a representative agent if their aggregate stochastic behaviour also fits the model. We show that the Luce model and several prominent extensions thereof do not have a representative agent. On the positive side, we show that the random utility model and several domain-specific restrictions thereof do have a representative agent.

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  • Jose Apesteguia & Miguel A. Ballester, 2016. "Stochastic representatitve agent," Economics Working Papers 1536, Department of Economics and Business, Universitat Pompeu Fabra.
    • Handle: RePEc:upf:upfgen:1536
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    1. Mantel, Rolf R., 1974. "On the characterization of aggregate excess demand," Journal of Economic Theory, Elsevier, vol. 7(3), pages 348-353, March.
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    7. Jose Apesteguia & Miguel A. Ballester & Jay Lu, 2017. "Single‐Crossing Random Utility Models," Econometrica, Econometric Society, vol. 85, pages 661-674, March.
    8. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, September.
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    Cited by:

    1. Yariv, Leeat & Jackson, Matthew O., 2018. "The Non-Existence of Representative Agents," CEPR Discussion Papers 13397, C.E.P.R. Discussion Papers.
    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.

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    More about this item

    Keywords

    Representative agent; Stochastic choice.;

    JEL classification:

    • D0 - Microeconomics - - General
    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models

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