Behavioral and Descriptive Forms of Choice Models
42 Pages Posted: 7 Apr 2014 Last revised: 30 Sep 2014
Date Written: March 2014
Empirical work on choice models, especially work on relatively new topics or data sets, often starts with descriptive, or what is often colloquially referred to as "reduced form", results. Our descriptive form formalizes this process. It is derived from the underlying behavioral model, has an interpretation in terms of fit, and can sometimes be used to quantify biases in agents' expectations. We consider estimators for the descriptive form of discrete choice models with (and without) interacting agents that take account of approximation errors as well as unobservable sources of endogeneity. We conclude with an investigation of the descriptive form of two period entry models.
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