A Representative Consumer Theory of the Logit Model
AbstractThe log it model is usually derived from a discrete choice approach with stoc hastic utilities. It is shown here that the logit demand system may also be derived from the maximization of a deterministic, entropy-type utility. The latter may be interpreted as the preference function of a representative consumer with variety-seeking behavior. This altern ative view suggests a generalization of the standard logit which allo ws total demand to be determined endogenously. Copyright 1988 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
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Bibliographic InfoArticle provided by Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association in its journal International Economic Review.
Volume (Year): 29 (1988)
Issue (Month): 3 (August)
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- ANDERSON, S. & de PALMA, A. & THISSE, J.-F., 1986. "A representative consumer theory of the logit model," CORE Discussion Papers 1986043, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- ANDERSON, Simon & de PALMA, André & THISSE, Jacques-François, . "A representative consumer theory of the logit model," CORE Discussion Papers RP -805, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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