TY - JOUR
T1 - A characterization of the Luce choice rule for an arbitrary collection of menus
AU - Alós-Ferrer, Carlos
AU - Mihm, Maximilian
N1 - Publisher Copyright:
© 2024 The Author(s)
PY - 2025/1
Y1 - 2025/1
N2 - The Luce Choice Rule (or, equivalently, the multinomial logit model) is extensively used in economics and other fields. Classical characterizations rest on Luce's Choice Axiom, when all choice sets are available, and Luce's Product Rule in the case of binary choice. Yet, actual datasets typically consist neither of all choice sets nor all binary choice sets. We provide a characterization for the general case, allowing also for zero choice probabilities. Building upon this characterization, we derive implications for experimental design in terms of three criteria: falsification, identification, and prediction.
AB - The Luce Choice Rule (or, equivalently, the multinomial logit model) is extensively used in economics and other fields. Classical characterizations rest on Luce's Choice Axiom, when all choice sets are available, and Luce's Product Rule in the case of binary choice. Yet, actual datasets typically consist neither of all choice sets nor all binary choice sets. We provide a characterization for the general case, allowing also for zero choice probabilities. Building upon this characterization, we derive implications for experimental design in terms of three criteria: falsification, identification, and prediction.
KW - Censored Luce choice rule
KW - Luce choice rule
KW - Multinomial logit model
KW - Stochastic choice
UR - http://www.scopus.com/inward/record.url?scp=85211323924&partnerID=8YFLogxK
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U2 - 10.1016/j.jet.2024.105941
DO - 10.1016/j.jet.2024.105941
M3 - Article
AN - SCOPUS:85211323924
SN - 0022-0531
VL - 223
JO - Journal of Economic Theory
JF - Journal of Economic Theory
M1 - 105941
ER -