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Average Choice

Ahn, David and Echenique, Federico and Saito, Kota (2015) Average Choice. Social Science Working Paper, 1409. California Institute of Technology , Pasadena, California.

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This is an investigation of stochastic choice when only the average of the choices is observable. For example when one observes aggregate sales numbers from a store, but not the frequency with which each item was purchased. The focus of our work is on the Luce model, also known as the Logit model. We show that a simple path independence property of average choice uniquely characterizes the Luce model. We also characterize the linear Luce mode, using similar tools. A linear version of the Luce model is used most frequently in empirical work by applied economists. Our characterization is based on the property of path independence, which runs counter to early impossibility results on path independent choice. From an empirical perspective, our results provide a small-sample advantage over the tests of Luce's model that rely on estimating choice frequencies.

Item Type:Report or Paper (Working Paper)
Echenique, Federico0000-0002-1567-6770
Saito, Kota0000-0003-1189-8912
Additional Information:October 2015.
Group:Social Science Working Papers
Subject Keywords:Stochastic Choice, Logit Model, Luce Model, Path independence, Average choice
Series Name:Social Science Working Paper
Issue or Number:1409
Classification Code:JEL D01,D10
Record Number:CaltechAUTHORS:20160321-140851688
Persistent URL:
Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:65552
Deposited On:23 Mar 2016 21:59
Last Modified:03 Mar 2020 13:01

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