eduzhai > Applied Sciences > Computer Science >

Income Effects and Rationalizability in Multinomial Choice Models

  • KanKan
  • (0) Download
  • 20210425
  • Save

... pages left unread,continue reading

Document pages: 22 pages

Abstract: McFadden s Random-Utility Model of multinomial choice has long been theworkhorse of applied research. We establish shape-restrictions under whichmultinomial choice-probability functions can be rationalized via random-utilitymodels with nonparametric heterogeneity and general income-effects. Whencombined with an additional restriction, the above conditions are shown to benecessary and sufficient for the canonical Additive Random Utility Model(ARUM). The sufficiency-proof is constructive, and facilitates nonparametricidentification of preference-distributions. A corollary establishes thatSlutsky-symmetry, a key condition for previous rationalizability results(Daly-Zachary 1978, Armstrong-Vickers 2015), is equivalent to absence ofincome-effects. The theory of partial differential equations plays a key rolein our analys

Please select stars to rate!

         

0 comments Sign in to leave a comment.

    Data loading, please wait...
×