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Dual random utility maximisation
journal contribution
posted on 2023-06-09, 08:41 authored by Paola Manzini, Marco MariottiMany prominent regularities of stochastic choice, such as the attraction, similarity and compromise effects, are incompatible with Random Utility Maximisation (RUM) as they violate Monotonicity. We argue that these regularities can be conveniently represented by a variation of RUM in which utility depends on only two states and state probabilities are allowed to depend on the menu. We call this model Dual Ran- dom Utility Maximisation (dRUM). dRUM is a parsimonious model that admits vio- lations of Monotonicity. We characterise dRUM in terms of three transparent expan- sion/contraction conditions. We also characterise the important special case in which state probabilities are constant across menus.
History
Publication status
- Published
File Version
- Accepted version
Journal
Journal of Economic TheoryISSN
0022-0531Publisher
ElsevierExternal DOI
Volume
177Page range
162-182Series
School of Economics and Finance Discussion PaperDepartment affiliated with
- Economics Publications
Institution
University of St AndrewsFull text available
- Yes
Peer reviewed?
- Yes
Legacy Posted Date
2018-05-31First Open Access (FOA) Date
2019-12-05First Compliant Deposit (FCD) Date
2018-05-30Usage metrics
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