Deliberately stochastic

Simone Cerreia-Vioglio, David Dillenberger, Pietro Ortoleva, Gil Riella

Research output: Contribution to journalArticlepeer-review

32 Scopus citations

Abstract

We study stochastic choice as the outcome of deliberate randomization. We derive a general representation of a stochastic choice function where stochasticity allows the agent to achieve from any set the maximal element according to her underlying preferences over lotteries. We show that in this model stochasticity in choice captures complementarity between elements in the set, and thus necessarily implies violations of Regularity/Monotonicity, one of the most common properties of stochastic choice. This feature separates our approach from other models, e.g., Random Utility.

Original languageEnglish (US)
Pages (from-to)2425-2445
Number of pages21
JournalAmerican Economic Review
Volume109
Issue number7
DOIs
StatePublished - Jul 2019

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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