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Single-Crossing Random Utility Models

Author

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  • Jose Apesteguia
  • Miguel Ángel Ballester

Abstract

We propose a novel model of stochastic choice: the single-crossing random utility model (SCRUM). This is a random utility model in which the collection of utility functions satisfies the single-crossing property. We offer a characterization of SCRUMs based on three easy-to-check properties: Positivity, Monotonicity and Centrality. The identified collection of utility functions and associated probabilities is basically unique. We establish a stochastic monotone comparative result for the case of SCRUMs and study several generalizations of SCRUMs.

Suggested Citation

  • Jose Apesteguia & Miguel Ángel Ballester, 2016. "Single-Crossing Random Utility Models," Working Papers 891, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:891
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    References listed on IDEAS

    as
    1. Jose Apesteguia & Miguel A. Ballester, 2018. "Monotone Stochastic Choice Models: The Case of Risk and Time Preferences," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 74-106.
    2. Faruk Gul & Paulo Natenzon & Wolfgang Pesendorfer, 2014. "Random Choice as Behavioral Optimization," Econometrica, Econometric Society, vol. 82, pages 1873-1912, September.
    3. Ian Jewitt, 1987. "Risk Aversion and the Choice Between Risky Prospects: The Preservation of Comparative Statics Results," Review of Economic Studies, Oxford University Press, vol. 54(1), pages 73-85.
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    Citations

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    Cited by:

    1. Natalia Lazzati & John K.-H. Quah & Koji Shirai, 2018. "Nonparametric analysis of monotone choice," Discussion Paper Series 184, School of Economics, Kwansei Gakuin University.
    2. Carlos Alos-Ferrer & Ernst Fehr & Nick Netzer, 2018. "Time will tell - Recovering Preferences when Choices are Noisy," Papers 1811.02497, arXiv.org.
    3. Mira Frick & Ryota Iijima & Tomasz Strzalecki, 2019. "Dynamic Random Utility," Econometrica, Econometric Society, vol. 87(6), pages 1941-2002, November.
    4. Manzini, Paola & Mariotti, Marco, 2018. "Dual random utility maximisation," Journal of Economic Theory, Elsevier, vol. 177(C), pages 162-182.
    5. Levon Barseghyan & Francesca Molinari & Matthew Thirkettle, 2019. "Discrete choice under risk with limited consideration," CeMMAP working papers CWP08/19, Centre for Microdata Methods and Practice, Institute for Fiscal Studies.
    6. Victor H. Aguiar & Maria Jose Boccardi & Nail Kashaev & Jeongbin Kim, 2018. "Does Random Consideration Explain Behavior when Choice is Hard? Evidence from a Large-scale Experiment," Papers 1812.09619, arXiv.org, revised Jun 2019.
    7. Matheus Costa & Paulo Henrique Ramos & Gil Riella, 2020. "Single-crossing choice correspondences," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 54(1), pages 69-86, January.
    8. Duffy, Sean & Gussman, Steven & Smith, John, 2019. "Judgments of length in the economics laboratory: Are there brains in choice?," MPRA Paper 93126, University Library of Munich, Germany.
    9. Lu, Jay & Saito, Kota, 2018. "Random intertemporal choice," Journal of Economic Theory, Elsevier, vol. 177(C), pages 780-815.
    10. Andrew Caplin & Mark Dean & John Leahy, 2017. "Rationally Inattentive Behavior: Characterizing and Generalizing Shannon Entropy," NBER Working Papers 23652, National Bureau of Economic Research, Inc.
    11. D. Pennesi, 2016. "Deciding fast and slow," Working Papers wp1082, Dipartimento Scienze Economiche, Universita' di Bologna.

    More about this item

    Keywords

    stochastic choice; single-crossing property; random utility models; monotone comparative statics;

    JEL classification:

    • D00 - Microeconomics - - General - - - General

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