Econ Research Seminar by Gerelt Tserenjigmid (Virginia Tech) on Mon, March 5th 2018
The Imbalanced Luce Model
Date: Monday, March 5
Time: 12-1pm
Venue: Room 1300
Abstract:
We develop a random choice model in which a decision maker divides the alternatives she faces into two groups, where one group is favored and thus she is more likely to choose alternatives in that group relative to alternatives in the non-favored group. We show that this seemingly specific decision making procedure in fact generalizes the Luce (1959) model (multinomial logit) and naturally captures limited consideration, reference-dependent choice, salience theory, and rational inattention. The model can be characterized by two simple weakenings of independence from irrelevant alternatives (IIA). We also characterize the generalization to K groups, which provides anaxiomatic foundation for the nested logit model.
Prof. Tserenjigmid’s website:
https://sites.google.com/site/gereltecon/
Date: Monday, March 5
Time: 12-1pm
Venue: Room 1300
Abstract:
We develop a random choice model in which a decision maker divides the alternatives she faces into two groups, where one group is favored and thus she is more likely to choose alternatives in that group relative to alternatives in the non-favored group. We show that this seemingly specific decision making procedure in fact generalizes the Luce (1959) model (multinomial logit) and naturally captures limited consideration, reference-dependent choice, salience theory, and rational inattention. The model can be characterized by two simple weakenings of independence from irrelevant alternatives (IIA). We also characterize the generalization to K groups, which provides anaxiomatic foundation for the nested logit model.
Prof. Tserenjigmid’s website:
https://sites.google.com/site/gereltecon/