Decomposable Stochastic Choice

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Tác giả: Fedor Sandomirskiy, Omer Tamuz

Ngôn ngữ: eng

Ký hiệu phân loại: 003.76 Stochastic systems

Thông tin xuất bản: 2023

Mô tả vật lý:

Bộ sưu tập: Metadata

ID: 200102

Comment: 49 pagesWe investigate inherent stochasticity in individual choice behavior across diverse decisions. Each decision is modeled as a menu of actions with outcomes, and a stochastic choice rule assigns probabilities to actions based on the outcome profile. Outcomes can be monetary values, lotteries, or elements of an abstract outcome space. We characterize decomposable rules: those that predict independent choices across decisions not affecting each other. For monetary outcomes, such rules form the one-parametric family of multinomial logit rules. For general outcomes, there exists a universal utility function on the set of outcomes, such that choice follows multinomial logit with respect to this utility. The conclusions are robust to replacing strict decomposability with an approximate version or allowing minor dependencies on the actions' labels. Applications include choice over time, under risk, and with ambiguity.
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