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Irrational Random Utility Models

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  • Daniele Caliari
  • Henrik Petri

Abstract

We show that the set of aggregate choices of a population of rational decision-makers - random utility models (RUMs) - can be represented by a population of irrational ones if, and only if, their preferences are sufficiently uncorrelated. We call this representation: Irrational RUM. We then show that almost all RUMs can be represented by a population in which at least some decision-makers are irrational and that under specific conditions their irrational behavior is unconstrained.

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  • Daniele Caliari & Henrik Petri, 2024. "Irrational Random Utility Models," Papers 2403.10208, arXiv.org.
    • Handle: RePEc:arx:papers:2403.10208
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    References listed on IDEAS

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