Stochastic Choice in Criterion Space

41 Pages Posted: 19 Sep 2017

See all articles by Tatiana Mayskaya

Tatiana Mayskaya

National Research University Higher School of Economics - International College of Economics and Finance; National Research University Higher School of Economics - Faculty of Economics

Date Written: May 30, 2014

Abstract

Many experiments demonstrate that an individual’s choice decisions are inconsistent. Following Luce (1959) and Block, Marschak, et al. (1960), a random choice approach to this problem has become very popular. It posits the existence of a probabilistic choice function that describes the probability of choosing an alternative from a given set of options. This paper contributes to the theoretical literature that narrows the class of random choice functions. Each alternative can be fully characterized by a vector in a n-dimensional space. A decision maker pays attention only to a randomly chosen subset of coordinates (or criteria) each time he faces a set of alternatives to choose from. Given this randomly chosen subset, he is perfectly rational, that is he chooses according to some strict preference ordering. For this procedure to be well-defined, the preference ordering must be separable with respect to criteria. In other words, the preference of the decision maker over any two alternatives should not depend on the characteristics that these alternatives have in common. This paper characterizes all systems of choice probabilities that are induced by this choice procedure.

Suggested Citation

Mayskaya, Tatiana, Stochastic Choice in Criterion Space (May 30, 2014). Available at SSRN: https://ssrn.com/abstract=3038369 or http://dx.doi.org/10.2139/ssrn.3038369

Tatiana Mayskaya (Contact Author)

National Research University Higher School of Economics - International College of Economics and Finance ( email )

Pokrovski Bulvar 11, Korpus Zh, Office 715
Moscow, 109028
Russia

National Research University Higher School of Economics - Faculty of Economics ( email )

Shabolovka 26
Moscow, 119049
Russia

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