Monotone stochastic choice models: The case of risk and time preferences
Suppose that, when evaluating two alternatives x and y by means of a parametric utility function, low values of the parameter indicate a preference for x and high values indicate a preference for y. We say that a stochastic choice model is monotone whenever the probability of choosing x is decreasin...
| Main Authors: | , |
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| Formato: | Journal article |
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University of Chicago Press
2018
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| _version_ | 1826306580676608000 |
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| author | Ballester, M Apesteguia, J |
| author_facet | Ballester, M Apesteguia, J |
| author_sort | Ballester, M |
| collection | OXFORD |
| description | Suppose that, when evaluating two alternatives x and y by means of a parametric utility function, low values of the parameter indicate a preference for x and high values indicate a preference for y. We say that a stochastic choice model is monotone whenever the probability of choosing x is decreasing in the preference parameter. We show that the standard use of random utility models in the context of risk and time preferences may sharply violate this monotonicity property, and argue that their use in preference estimation may be problematic. They may pose identification problems and could yield biased estimations. We then establish that the alternative random parameter models are always monotone. |
| first_indexed | 2024-03-07T06:50:06Z |
| format | Journal article |
| id | oxford-uuid:fc424f4a-4537-4e93-a3a0-29ede24df346 |
| institution | University of Oxford |
| last_indexed | 2024-03-07T06:50:06Z |
| publishDate | 2018 |
| publisher | University of Chicago Press |
| record_format | dspace |
| spelling | oxford-uuid:fc424f4a-4537-4e93-a3a0-29ede24df3462022-03-27T13:19:29ZMonotone stochastic choice models: The case of risk and time preferencesJournal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:fc424f4a-4537-4e93-a3a0-29ede24df346Symplectic Elements at OxfordUniversity of Chicago Press2018Ballester, MApesteguia, JSuppose that, when evaluating two alternatives x and y by means of a parametric utility function, low values of the parameter indicate a preference for x and high values indicate a preference for y. We say that a stochastic choice model is monotone whenever the probability of choosing x is decreasing in the preference parameter. We show that the standard use of random utility models in the context of risk and time preferences may sharply violate this monotonicity property, and argue that their use in preference estimation may be problematic. They may pose identification problems and could yield biased estimations. We then establish that the alternative random parameter models are always monotone. |
| spellingShingle | Ballester, M Apesteguia, J Monotone stochastic choice models: The case of risk and time preferences |
| title | Monotone stochastic choice models: The case of risk and time preferences |
| title_full | Monotone stochastic choice models: The case of risk and time preferences |
| title_fullStr | Monotone stochastic choice models: The case of risk and time preferences |
| title_full_unstemmed | Monotone stochastic choice models: The case of risk and time preferences |
| title_short | Monotone stochastic choice models: The case of risk and time preferences |
| title_sort | monotone stochastic choice models the case of risk and time preferences |
| work_keys_str_mv | AT ballesterm monotonestochasticchoicemodelsthecaseofriskandtimepreferences AT apesteguiaj monotonestochasticchoicemodelsthecaseofriskandtimepreferences |