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The Perception-Adjusted Luce Model

Echenique, Federico and Saito, Kota and Tserenjigmid, Gerelt (2013) The Perception-Adjusted Luce Model. Social Science Working Paper, 1379. California Institute of Technology , Pasadena, California. (Unpublished) http://resolver.caltech.edu/CaltechAUTHORS:20160321-134531088

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Abstract

We develop an axiomatic model that builds on Luce's (1959) model to incorporate a role for perception. We identify agents' "perception priorities" from their violations of Luce's axiom of independence from irrelevant alternatives. Using such perception priorities, we adjust choice probabilities to account for the effects of perception. Our axiomatization requires that the agents' adjusted random choice conforms to Luce's model. Our model can explain the attraction, compromise, and similarity effects, which are very well-documented behavioral phenomena in individual choice.


Item Type:Report or Paper (Working Paper)
Related URLs:
URLURL TypeDescription
http://resolver.caltech.edu/CaltechAUTHORS:20180228-092329391Related ItemPublished Version
ORCID:
AuthorORCID
Echenique, Federico0000-0002-1567-6770
Saito, Kota0000-0003-1189-8912
Tserenjigmid, Gerelt0000-0003-1412-9692
Additional Information:October 2013.
Group:Social Science Working Papers
Subject Keywords:Stochastic choice; Luce model; Independence of irrelevant alternatives; Compromise effect; Similarity effect; Attraction effect
Classification Code:JEL D01,D10
Record Number:CaltechAUTHORS:20160321-134531088
Persistent URL:http://resolver.caltech.edu/CaltechAUTHORS:20160321-134531088
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:65547
Collection:CaltechAUTHORS
Deposited By: Susan Vite
Deposited On:22 Mar 2016 20:55
Last Modified:28 Feb 2018 17:34

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