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on Discrete Choice Models |
| By: | Claudia Pigini; Alessandro Pionati; Francesco Valentini |
| Abstract: | We study the application of the Grouped Fixed Effects (GFE) estimator (Bonhomme et al., ECMTA 90(2):625-643, 2022) to binary choice models for network and panel data. This approach discretizes unobserved heterogeneity via k-means clustering and performs maximum likelihood estimation, reducing the number of fixed effects in finite samples. This regularization helps analyze small/sparse networks and rare events by mitigating complete separation, which can lead to data loss. We focus on dynamic models with few state transitions and network formation models for sparse networks. The effectiveness of this method is demonstrated through simulations and real data applications. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.06446 |
| By: | Emily Quiroga |
| Abstract: | The importance of maritime heritage in providing benefits such as a sense of place and identity has been widely discussed. However, there remains a lack of comprehensive quantitative analysis, particularly regarding monetary valuation and its impact on people's preferences. In this study, I present the results of a choice experiment that assesses the value of the maritime cultural heritage associated with shrimp fishing through seafood consumption preferences in Germany. Additionally, I investigate people's attitudes toward cultural heritage and examine how these attitudes affect their stated preferences. I find that these attitudes are significantly stronger in towns where local fishermen led a prominent awareness campaign on fishing culture during the study period. Moreover, I observe a positive willingness to pay for a cultural heritage attribute in shrimp dishes, which varies depending on individuals' attitudes toward cultural heritage. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.07370 |
| By: | Keisuke Bando; Kenzo Imamura; Yasushi Kawase |
| Abstract: | Choice correspondences are crucial in decision-making, especially when faced with indifferences or ties. While tie-breaking can transform a choice correspondence into a choice function, it often introduces inefficiencies. This paper introduces a novel notion of path-independence (PI) for choice correspondences, extending the existing concept of PI for choice functions. Intuitively, a choice correspondence is PI if any consistent tie-breaking produces a PI choice function. This new notion yields several important properties. First, PI choice correspondences are rationalizabile, meaning they can be represented as the maximization of a utility function. This extends a core feature of PI in choice functions. Second, we demonstrate that the set of choices selected by a PI choice correspondence for any subset forms a generalized matroid. This property reveals that PI choice correspondences exhibit a nice structural property. Third, we establish that choice correspondences rationalized by ordinally concave functions inherently satisfy the PI condition. This aligns with recent findings that a choice function satisfies PI if and only if it can be rationalized by an ordinally concave function. Building on these theoretical foundations, we explore stable and efficient matchings under PI choice correspondences. Specifically, we investigate constrained efficient matchings, which are efficient (for one side of the market) within the set of stable matchings. Under responsive choice correspondences, such matchings are characterized by cycles. However, this cycle-based characterization fails in more general settings. We demonstrate that when the choice correspondence of each school satisfies both PI and monotonicity conditions, a similar cycle-based characterization is restored. These findings provide new insights into the matching theory and its practical applications. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.09265 |
| By: | Saw, Htay-Wah; West, Brady; Couper, Mick P.; Axinn, William G. |
| Abstract: | The American Family Health Study (AFHS) collected family health and fertility data from a national probability sample of persons aged 18–49 between September 2021 and May 2022, using web and mail exclusively. In July 2022, we surveyed AFHS respondents and gauged their willingness to become part of a national web panel that would create novel longitudinal data on these topics. We focus on predictors of willingness to participate, identifying the potential selection bias that this type of approach may introduce. We found that efforts of this type to create a national web panel may introduce potential selection bias in estimates based on the panel respondents, with individuals having higher socioeconomic status being more cooperative. Thus, alternative recruitment strategies and re-weighting of the subsample may be needed to further reduce selection bias. We present methodological implications of our results, limitations of our approach, and suggestions for further research on this topic. |
| Date: | 2023–07–27 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:x4kv3_v1 |
| By: | Keunwoo Lim; Ting Ye; Fang Han |
| Abstract: | We propose a new minimum-distance estimator for linear random coefficient models. This estimator integrates the recently advanced sliced Wasserstein distance with the nearest neighbor methods, both of which enhance computational efficiency. We demonstrate that the proposed method is consistent in approximating the true distribution. Additionally, our formulation encourages a diffusion process-based algorithm, which holds independent interest and potential for broader applications. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.04654 |
| By: | Yanhao (Max); Wei; Zhenling Jiang |
| Abstract: | We study an alternative use of machine learning. We train neural nets to provide the parameter estimate of a given (structural) econometric model, for example, discrete choice or consumer search. Training examples consist of datasets generated by the econometric model under a range of parameter values. The neural net takes the moments of a dataset as input and tries to recognize the parameter value underlying that dataset. Besides the point estimate, the neural net can also output statistical accuracy. This neural net estimator (NNE) tends to limited-information Bayesian posterior as the number of training datasets increases. We apply NNE to a consumer search model. It gives more accurate estimates at lighter computational costs than the prevailing approach. NNE is also robust to redundant moment inputs. In general, NNE offers the most benefits in applications where other estimation approaches require very heavy simulation costs. We provide code at: https://nnehome.github.io. |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.04945 |
| By: | Daniele Caliari; Henrik Petri |
| Abstract: | We characterize regularity (Block & Marschak, 1960) within a novel stochastic model: the General Threshold Luce model [GTLM]. We apply our results to study choice overload, identified by regularity violations that impose a welfare cost on the decision-maker. Generalizing our characterization results, we identify necessary and sufficient conditions for choice overload within GTLMs and, in doing so, disentangle two well-known causes: low discriminatory power (Frick, 2016) and limited attention (Lleras et al., 2017). |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.21063 |
| By: | Eßer, Jana; Flörchinger, Daniela; Frondel, Manuel; Sommer, Stephan |
| Abstract: | Cognitive inconsistency, the discrepancy between individuals' behavior and their self-image, can cause the psychological discomfort called cognitive dissonance. In this paper, we investigate whether providing information that enhances the salience of cognitive inconsistency can increase sustainable consumption. Specifically, we analyze whether individuals avoid cognitive inconsistency by (a) a change in behavior to comply with own attitudes and by (b) the denial of attitudes and of knowledge about the criticism of conventional online shopping. To this end, we embed an incentivized discrete-choice task in a large-scale survey conducted in Germany in 2021, with the choice being between a voucher for either a conventional or a sustainable online market place. With our experimental setting, we aim to increase the salience of cognitive inconsistency by either randomly reminding participants of their previously stated attitudes towards sustainable production or by informing them about the typical criticism of conventional online shopping. Our empirical results indicate that individuals adapt their behavior after having received the reminder of their stated attitudes and the criticism about conventional online shopping. Yet, participants do not deceive themselves by aligning their attitudes with their behavior or by denying to have been aware of the criticism. |
| Abstract: | Kognitive Inkonsistenz, d. h. die Diskrepanz zwischen dem Verhalten einer Person und ihrem Selbstbild, kann ein psychologisches Unbehagen hervorrufen, das als kognitive Dissonanz bezeichnet wird. In diesem Beitrag untersuchen wir, ob die Bereitstellung von Informationen, die die Bedeutung kognitiver Inkonsistenz erhöhen, den nachhaltigen Konsum steigern kann. Konkret analysieren wir, ob Individuen kognitive Inkonsistenz vermeiden, indem sie (a) ihr Verhalten ändern, um mit ihren eigenen Einstellungen übereinzustimmen, und (b) indem sie ihre Einstellungen und ihr Wissen über die Kritik am konventionellen Online-Shopping verleugnen. Zu diesem Zweck betten wir eine Discrete-Choice-Aufgabe in eine groß angelegte Befragung in Deutschland aus dem Jahr 2021 ein, bei der die Wahl zwischen einem Gutschein für einen konventionellen oder einen nachhaltigen Online-Marktplatz besteht. Mit unserem experimentellen Setting zielen wir darauf ab, die Salienz der kognitiven Inkonsistenz zu erhöhen, indem wir die Teilnehmenden entweder zufällig an ihre zuvor geäußerten Einstellungen zu nachhaltiger Produktion erinnern oder sie über die typische Kritik am konventionellen Online-Einkauf informieren. Unsere empirischen Ergebnisse deuten darauf hin, dass Personen ihr Verhalten anpassen, nachdem sie an ihre Einstellungen erinnert und über die Kritik am konventionellen Online-Shopping informiert wurden. Die Teilnehmenden täuschen sich jedoch nicht selbst, indem sie ihre Einstellungen mit ihrem Verhalten in Einklang bringen oder leugnen, von der Kritik gewusst zu haben. |
| Keywords: | Behavioral economics, cognitive dissonance, sustainable behavior |
| JEL: | A13 H23 D91 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:rwirep:311295 |
| By: | Loeser, John Ashton |
| Abstract: | The household welfare gains from financial inclusion are empirically elusive. This paper establishes that household welfare gains from a financial technology are equal to the area under dynamically compensated demand in a household model with incomplete financial markets, and general technology, preferences, and choice sets. This paper then estimates compensated demand for financial technologies leveraging three randomized control trials that introduce experimental variation in interest rates. Welfare gains per dollar lent or saved are small as compensated demand elasticities are large, but still correspond to large aggregate welfare gains from financial inclusion. |
| Date: | 2023–06–12 |
| URL: | https://d.repec.org/n?u=RePEc:wbk:wbrwps:10481 |
| By: | Kensei Nakamura |
| Abstract: | This paper examines normatively acceptable criteria for evaluating social states when individuals are responsible for their skills or productivity and these factors should be accounted for. We consider social choice rules over sets of feasible utility vectors \`a la Nash's (1950) bargaining problem. First, we identify necessary and sufficient conditions for choice rules to be rationalized by welfare orderings or functions over ability-normalized utility vectors. These general results provide a foundation for exploring novel choice rules with the normalization and providing their axiomatic foundations. By adding natural axioms, we propose and axiomatize a new class of choice rules, which can be viewed as combinations of three key principles: distribution according to individuals' abilities, utilitarianism, and egalitarianism. Furthermore, we show that at the axiomatic level, this class of choice rules is closely related to the classical bargaining solution introduced by Kalai and Smorodinsky (1975). |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2502.04989 |
| By: | Pedro Bordalo; Nicola Gennaioli; Giacomo Lanzani; Andrei Shleifer |
| Abstract: | We present a theory of decisions in which attention to the features of choice options is determined by the decision maker's categorization of the current choice problem in a set of problems she solved in the past. Categorization depends on goal-relevant as well as contextual problem-level features. The model yields systematic heterogeneity in attention and choice in a given problem based on different past experiences, rigidity of choices when categorization does not change despite new data, and discontinuous shifts when changes in bottom-up salient features cause re-categorization. The model unifies major puzzles and framing effects in riskless, statistical, and lottery choice based on heterogenous and unstable mental representations. |
| JEL: | D91 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33466 |
| By: | Joshua S. Gans |
| Abstract: | This paper examines the relationship between Knightian uncertainty and Bayesian approaches to entrepreneurship. Using Bewley's formal model of uncertainty and incomplete preferences, it demonstrates that key predictions from Bayesian entrepreneurship remain robust when accounting for Knightian uncertainty, particularly regarding experimentation, venture financing, and strategic choice. The analysis shows that while Knightian uncertainty creates a more challenging decision environment, it maintains consistency with the three pillars of Bayesian entrepreneurship: heterogeneous beliefs, stronger entrepreneurial priors, and Bayesian updating. The paper also explores connections to effectuation theory, finding that formal uncertainty models can bridge different entrepreneurial methodologies. |
| JEL: | D81 O30 |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33507 |
| By: | J. Pfiffelmann; O. Untilov (Audencia Business School); J. Thogersen; R. Franck |
| Abstract: | In response to regulatory requirements and consumer demand for sustainable products, producers of organic products are beginning to use laser marking to reduce packaging and thereby packaging waste. However, the consumer responses to this "high-tech" eco-innovation remain unexplored. Using a mixed-method approach, we collected qualitative and quantitative data on responses to the laser marking of organic products from 328 French participants. Guided by the theory of consumption values and innovation resistance theory, we conducted thematic analysis of answers to an open-ended question which probed consumers' motives for and barriers to adopting laser marking. The most frequently stated motive was ecological benefits, and the most reported barriers were risks and tradition. Structural equation modeling revealed that attitudes toward laser-marked organic products are positively impacted by social, emotional, and functional values and are negatively impacted by barriers related to image and emotions. Consumers' attitudes toward laser-marked organic products strongly affect their willingness to buy such products. To increase the acceptance of laser marking, managers and policymakers should mitigate false-negative consumer perceptions, including doubts about its eco-friendliness and safety, thereby facilitating greater acceptance of this eco-innovation. |
| Keywords: | Eco-innovation adoption, Laser marking, Mixed-method design, Organic labeling, Theory of consumption values, Innovation resistance theory |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-04957879 |