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Multiple discrete choice and quantity with order statistic marginal utilities

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  • Webster, Scott

Abstract

This paper presents a random utility maximization model for individuals selecting discrete quantities from a set of n alternatives. Multiple alternatives with positive quantities may be selected. Diminishing marginal utility to quantity of each alternative is modeled via order statistics of independent Gumbel random variables. The model is parsimonious and tractable, admitting closed-form expressions for choice probabilities. As such, the model is amenable to maximum likelihood estimation of structural parameters from observed choices.

Suggested Citation

  • Webster, Scott, 2023. "Multiple discrete choice and quantity with order statistic marginal utilities," Journal of choice modelling, Elsevier, vol. 46(C).
    • Handle: RePEc:eee:eejocm:v:46:y:2023:i:c:s1755534522000525
    DOI: 10.1016/j.jocm.2022.100395
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    References listed on IDEAS

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    1. Bhat, Chandra R. & Mondal, Aupal & Asmussen, Katherine E. & Bhat, Aarti C., 2020. "A multiple discrete extreme value choice model with grouped consumption data and unobserved budgets," Transportation Research Part B: Methodological, Elsevier, vol. 141(C), pages 196-222.
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    3. Bhat, Chandra R., 2005. "A multiple discrete-continuous extreme value model: formulation and application to discretionary time-use decisions," Transportation Research Part B: Methodological, Elsevier, vol. 39(8), pages 679-707, September.
    4. Hausman, Jerry A. & Leonard, Gregory K. & McFadden, Daniel, 1995. "A utility-consistent, combined discrete choice and count data model Assessing recreational use losses due to natural resource damage," Journal of Public Economics, Elsevier, vol. 56(1), pages 1-30, January.
    5. Beggs, S. & Cardell, S. & Hausman, J., 1981. "Assessing the potential demand for electric cars," Journal of Econometrics, Elsevier, vol. 17(1), pages 1-19, September.
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