Yogurts Choose Consumers? Identification of Random Utility Models via Two-Sided Matching
52 Pages Posted: 9 Mar 2017
Date Written: March 6, 2017
In this paper we describe an equivalence between random utility discrete-choice models and two-sided matching models with imperfectly transferable utility, and we exploit its consequences. Based on it, we suggest new approaches for estimation and identification of non-additive random utility models (NARUM), in which the utility shocks do not affect decision-makers’ utilities in an additive manner. The estimation algorithms and procedures we describe are inspired by those in the matching literature. A noteworthy feature of our algorithms is that they yield the point estimate when the model is point identified, and yield the upper and lower bounds on the parameters under partial identification.
Keywords: Random Utility Models, Two-Sided Matching, Optimal Transport, Pure Characteristics Model, Deferred Acceptance, Partial Identification
JEL Classification: C51, C60
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