Discrete choice and stochastic utility maximization
AbstractDiscrete choice models are usually derived from the assumption of random utility maximization. We consider the reverse problem, whether choice probabilities are consistent with maximization of random utilities. This leads to tests that consider the variation of these choice probabilities with the average utilities of the alternatives. By restricting the range of the average utilities we obtain a sequence of tests with fewer maintained assumptions. In an empirical application, even the test with the fewest maintained assumptions rejects the hypothesis of random utility maximization. Copyright Royal Economic Society, 2003
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Econometrics Journal.
Volume (Year): 6 (2003)
Issue (Month): 1 (06)
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- Ruud H Koning & Geert Ridder, 1999. "Discrete Choice and Stochastic Utility Maximization," Economics Working Paper Archive 413, The Johns Hopkins University,Department of Economics.
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