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Odds supermodularity and the Luce rule

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  • Doğan, Serhat
  • Yıldız, Kemal

Abstract

We present a characterization of the Luce rule in terms of positivity and a new choice axiom called odds supermodularity that strengthens the regularity axiom. This new characterization illuminates a connection that goes unnoticed, and sheds light on the behavioral underpinnings of the Luce rule and its extensions from a different perspective. We show that odds supermodularity per se characterizes a structured extension of the Luce rule that accommodates zero probability choices. We identify the random choice model characterized via a stochastic counterpart of Plott (1973)'s path independence axiom, which strengthens odds supermodularity.

Suggested Citation

  • Doğan, Serhat & Yıldız, Kemal, 2021. "Odds supermodularity and the Luce rule," Games and Economic Behavior, Elsevier, vol. 126(C), pages 443-452.
    • Handle: RePEc:eee:gamebe:v:126:y:2021:i:c:p:443-452
    DOI: 10.1016/j.geb.2021.01.008
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    References listed on IDEAS

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    More about this item

    Keywords

    Random choice; Luce rule; Supermodularity; Zero probability choices; Stochastic path independence;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles

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