Probabilistic Choice as a Result of Mistakes
Abstract
We derive a family of probabilistic choice models including the multinomial logit model, from a microeconomic model in which the decision maker has to make some effort in order to avoid mistakes when implementing any desired outcome. The disutility of this effort enters the decision maker's goal function in an additively separable way. A particular disutility function, yielding the multinomial logit and GEV models as special cases, is characterized axiomatically. Unlike the usual random-utility approach, the present approach leads to a normalization of the achieved utility with respect to the number of alternatives. The present model also applies to continuum choice sets in Euclidean spaces, and provides a microeconomic foundation for quantal response models in game theory.Download Info
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Bibliographic Info
Paper provided by Research Institute of Industrial Economics (IFN) in its series Research Institute of Industrial Economics Working Papers with number 544.Length: 18 pages
Date of creation: 2000
Date of revision:
Handle: RePEc:fth:iniesr:544
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Postal: Research Institute of Industrial Economics (IFN) ; B.O. Box 55665, SE-102 15 Stockholm, Sweden
Phone: +46 8 665 4500
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Related research
Keywords: MODELS ; MICROECONOMICS ; GAMES;Other versions of this item:
- Mattsson, Lars-Göran & Weibull, Jörgen W., 2000. "Probabilistic Choice as a Result of Mistakes," Working Paper Series 544, Research Institute of Industrial Economics.
- D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
- D60 - Microeconomics - - Welfare Economics - - - General
- D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
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Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Mattsson, Lars-Goran & Weibull, Jorgen W., 2002. "Probabilistic choice and procedurally bounded rationality," Games and Economic Behavior, Elsevier, vol. 41(1), pages 61-78, October.
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