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Choice in the Presence of Experts

Author

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  • Walter Beckert

    (Department of Economics, Mathematics & Statistics, Birkbeck)

Abstract

This paper considers the micro-econometric analysis of discrete choice problems in which the choice set is strategically pre-selected by a third-party advisor or expert. It delineates measures of efficiency loss arising from (i) the sets of relevant choice attributes being imperfectly aligned between ultimate bene ciary of the choice outcome and third-party expert, and (ii) pre-selected choice-sets being uniform across ultimate bene ciaries who differ in their subjective evaluations of relevant choice attributes. And it identi es inconsistencies in estimation when strategically pre-selected choice sets are treated as exogenous. Some applications to choice in healthcare and nancial services markets are sketched.

Suggested Citation

  • Walter Beckert, 2015. "Choice in the Presence of Experts," Birkbeck Working Papers in Economics and Finance 1503, Birkbeck, Department of Economics, Mathematics & Statistics.
  • Handle: RePEc:bbk:bbkefp:1503
    as

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    File URL: http://www.bbk.ac.uk/ems/research/wp/2015/PDFs/BWPEF1503.pdf
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    References listed on IDEAS

    as
    1. Hausman, Jerry A & Wise, David A, 1979. "Attrition Bias in Experimental and Panel Data: The Gary Income Maintenance Experiment," Econometrica, Econometric Society, vol. 47(2), pages 455-473, March.
    2. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
    3. Gravelle, Hugh S & Propper, Carol & Santos, Rita, 2013. "Does quality affect patients’ choice of doctor? Evidence from the UK," CEPR Discussion Papers 9534, C.E.P.R. Discussion Papers.
    4. Walter Beckert & Mette Christensen & Kate Collyer, 2012. "Choice of NHS‐funded Hospital Services in England," Economic Journal, Royal Economic Society, vol. 122(560), pages 400-417, May.
    5. repec:ecj:econjl:v:122:y:2012:i::p:400-417 is not listed on IDEAS
    6. Besanko, David & Perry, Martin K & Spady, Richard H, 1990. "The Logit Model of Monopolistic Competition: Brand Diversity," Journal of Industrial Economics, Wiley Blackwell, vol. 38(4), pages 397-415, June.
    7. Michelle Sovinsky Goeree, 2008. "Limited Information and Advertising in the U.S. Personal Computer Industry," Econometrica, Econometric Society, vol. 76(5), pages 1017-1074, September.
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    Citations

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    Cited by:

    1. Martin Gaynor & Carol Propper & Stephan Seiler, 2016. "Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service," American Economic Review, American Economic Association, vol. 106(11), pages 3521-3557, November.

    More about this item

    Keywords

    Discrete choice; expert; endogenous choice sets.;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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