Arbeitspapier

Probabilistic Choice as a Result of Mistakes

We derive a family of probabilistic choice models including the multinomial logit model, from a microeconomic model in which the decision maker has to make some effort in order to avoid mistakes when implementing any desired outcome. The disutility of this effort enters the decision maker's goal function in an additively separable way. A particular disutility function, yielding the multinomial logit and GEV models as special cases, is characterized axiomatically. Unlike the usual random-utility approach, the present approach leads to a normalization of the achieved utility with respect to the number of alternatives. The present model also applies to continuum choice sets in Euclidean spaces, and provides a microeconomic foundation for quantal response models in game theory.

Language
Englisch

Bibliographic citation
Series: IUI Working Paper ; No. 544

Classification
Wirtschaft
Consumer Economics: Theory
Welfare Economics: General
Criteria for Decision-Making under Risk and Uncertainty
Subject
Choice
Decision Theory
Mistakes
Wahrscheinlichkeitsrechnung
Entscheidungstheorie
Theorie

Event
Geistige Schöpfung
(who)
Mattsson, Lars-Göran
Weibull, Jörgen W.
Event
Veröffentlichung
(who)
The Research Institute of Industrial Economics (IUI)
(where)
Stockholm
(when)
2000

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Mattsson, Lars-Göran
  • Weibull, Jörgen W.
  • The Research Institute of Industrial Economics (IUI)

Time of origin

  • 2000

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