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Gradual Pairwise Comparison and Stochastic Choice

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  • Rohan DUTTA

Abstract

Guided by evidence from eye-tracking studies of choice, pairwise comparison is assumed to be the building block of the decision-making procedure. A decision-maker with a rational preference may nevertheless consider the constituent pairwise comparisons gradually. Facing a choice problem she may be unable to complete all relevant comparisons and choose with equal odds from alternatives not found inferior. Stochastic choice data consistent with such behaviour is characterized and used to infer the underlying preference relation and the order of pairwise comparisons. The choice procedure offers a novel rationale for behavioural phenomena such as the similarity, attraction and compromise effects.

Suggested Citation

  • Rohan DUTTA, 2018. "Gradual Pairwise Comparison and Stochastic Choice," Cahiers de recherche 23-2018, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
    • Handle: RePEc:mtl:montec:23-2018
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    References listed on IDEAS

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    1. Elena Reutskaja & Rosemarie Nagel & Colin F. Camerer & Antonio Rangel, 2011. "Search Dynamics in Consumer Choice under Time Pressure: An Eye-Tracking Study," American Economic Review, American Economic Association, vol. 101(2), pages 900-926, April.
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    Cited by:

    1. Bhavook Bhardwaj & Kriti Manocha, 2021. "Choice by Rejection," Papers 2108.07424, arXiv.org.

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    More about this item

    Keywords

    revealed preference; bounded rationality; stochastic choice;
    All these keywords.

    JEL classification:

    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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