IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp6905.html
   My bibliography  Save this paper

Stochastic Choice and Consideration Sets

Author

Listed:
  • Manzini, Paola

    () (University of Sussex)

  • Mariotti, Marco

    () (Queen Mary, University of London)

Abstract

We model a boundedly rational agent who suffers from limited attention. The agent considers each feasible alternative with a given (unobservable) probability, the attention parameter, and then chooses the alternative that maximises a preference relation within the set of considered alternatives. Both the preference and the attention parameters are identified uniquely by stochastic choice data. The model is the only one for which the impact of removing any alternative a on the choice probability of any other alternative b is non-negative, asymmetric (either a impacts b or vice-versa), menu independent, neutral (the same on any alternative in the menu), and consistent with the impacts on a and b by a common third alternative.

Suggested Citation

  • Manzini, Paola & Mariotti, Marco, 2012. "Stochastic Choice and Consideration Sets," IZA Discussion Papers 6905, Institute for the Study of Labor (IZA).
    • Handle: RePEc:iza:izadps:dp6905
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp6905.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Clark, Stephen A., 1995. "Indecisive choice theory," Mathematical Social Sciences, Elsevier, vol. 30(2), pages 155-170, October.
    2. Ariel Rubinstein & Yuval Salant, 2012. "Eliciting Welfare Preferences from Behavioural Data Sets," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 375-387.
    3. Nedungadi, Prakash, 1990. " Recall and Consumer Consideration Sets: Influencing Choice without Altering Brand Evaluations," Journal of Consumer Research, Oxford University Press, vol. 17(3), pages 263-276, December.
    4. Jörg Rieskamp & Jerome R. Busemeyer & Barbara A. Mellers, 2006. "Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice," Journal of Economic Literature, American Economic Association, vol. 44(3), pages 631-661, September.
    5. Christopher Tyson, 2013. "Behavioral implications of shortlisting procedures," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 41(4), pages 941-963, October.
    6. Filip Matêjka & Alisdair McKay, 2015. "Rational Inattention to Discrete Choices: A New Foundation for the Multinomial Logit Model," American Economic Review, American Economic Association, vol. 105(1), pages 272-298, January.
    7. Cheremukhin, Anton A. & Popova, Anna & Tutino, Antonella, 2011. "Experimental evidence on rational inattention," Working Papers 1112, Federal Reserve Bank of Dallas.
    8. Kfir Eliaz & Ran Spiegler, 2011. "Consideration Sets and Competitive Marketing," Review of Economic Studies, Oxford University Press, vol. 78(1), pages 235-262.
    9. Richard Mckelvey & Thomas Palfrey, 1998. "Quantal Response Equilibria for Extensive Form Games," Experimental Economics, Springer;Economic Science Association, vol. 1(1), pages 9-41, June.
    10. Michelle Sovinsky Goeree, 2005. "Advertising in the US Personal Computer Industry," Industrial Organization 0503002, University Library of Munich, Germany.
    11. Mark Voorneveld, 2006. "Probabilistic Choice in Games: Properties of Rosenthal’s t-Solutions," International Journal of Game Theory, Springer;Game Theory Society, vol. 34(1), pages 105-121, April.
    12. Daniel McFadden, 2001. "Economic Choices," American Economic Review, American Economic Association, vol. 91(3), pages 351-378, June.
    13. 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.
    14. repec:spr:joecth:v:65:y:2018:i:3:d:10.1007_s00199-016-1025-9 is not listed on IDEAS
    15. Paola Manzini & Marco Mariotti, 2007. "Sequentially Rationalizable Choice," American Economic Review, American Economic Association, vol. 97(5), pages 1824-1839, December.
    16. Yusufcan Masatlioglu & Daisuke Nakajima & Erkut Y. Ozbay, 2012. "Revealed Attention," American Economic Review, American Economic Association, vol. 102(5), pages 2183-2205, August.
    17. Yıldız, Kemal, 2016. "List-rationalizable choice," Theoretical Economics, Econometric Society, vol. 11(2), May.
    18. David S. Ahn & Todd Sarver, 2013. "Preference for Flexibility and Random Choice," Econometrica, Econometric Society, vol. 81(1), pages 341-361, January.
    19. 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.
    20. Eliaz, Kfir & Spiegler, Ran, 2011. "On the strategic use of attention grabbers," Theoretical Economics, Econometric Society, vol. 6(1), January.
    21. Faruk Gul & Paulo Natenzon & Wolfgang Pesendorfer, 2014. "Random Choice as Behavioral Optimization," Econometrica, Econometric Society, vol. 82, pages 1873-1912, September.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    discrete choice; random utility; logit model; consideration sets; revealed preferences; bounded rationality;

    JEL classification:

    • D0 - Microeconomics - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp6905. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.