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on Discrete Choice Models |
| By: | Martin Kolmar |
| Abstract: | Revealed preference theory (RPT) and its behavioral extension (BRPT) underpin an important strand of welfare economics. Their normative appeal rests on the claim that welfare can be inferred from observed behavior without substantive assumptions about what agents should value - a property I call value neutrality. This paper argues that such neutrality is structurally impossible. I develop a framework - the triangulation problem - identifying five dimensions along which inference from behavior to welfare is underdetermined: the partitioning of the alternative space, the preference domain, the choice rule, the social technology, and the phenomenological mapping from preferences to experience. A sixth problem - the agent's lack of experiential acquaintance with novel alternatives - compounds the underdeterminacy. Resolving these dimensions requires substantive commitments about value rationality - about what agents ought to care about and what counts for welfare. No specification of (B)RPT is both determinate enough to yield welfare rankings and neutral with respect to value rationality. I show that this impossibility entails a collapse thesis: (B)RPT understands itself as a subjectivist theory of well-being, but every operational specification embeds objectivist commitments - attitude-independent claims about what is basically good for the agent - in its auxiliary assumptions. In normative use, (B)RPT is a de-facto objectivist theory that presents itself in subjectivist form, concealing commitments that require philosophical justification behind an appearance of empirical neutrality. |
| Keywords: | revealed preference theory, (behavioral) welfare economics, value rationality, underdeterminacy, normative economics, subjectivism, objectivism, well-being |
| JEL: | B41 D01 D60 D63 I31 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12519 |
| By: | Alessio D’Amato (University of Napoli Parthenope; Sustainability Environmental Economics and Dynamics Studies (SEEDS)); Loredana Mirra (University of Rome “Tor Vergataâ€); Andrea Rampa (University of Rome “Tor Vergata†; Sustainability Environmental Economics and Dynamics Studies (SEEDS)) |
| Abstract: | This study analyses the determinants of consumer choice between bottled and tap water in Italy, a nation characterised by high bottled water consumption despite having a safe public supply. We first develop our testable predictions out of a simple conceptual framework based on Viscusi et al. (2015), augmented to account for pro-social attitudes and an “ego-rent†mechanism . Then, Using a large-scale Italian level survey of 7, 292 individuals, we employ an Extended Ordered Probit (EOP) framework to investigate the relationship across bottled and tap water, as well as the factors driving usage frequency. The robustness of results is also tested using a bivariate probit setting and a Conditional Mixed Process (CMP) model. Our findings show that a strong substitutability takes place between tap and bottled water. Also, the EOP approach allows us to establish a causal link between perceived subjective risks from tap water consumption (e.g., prior health issues or grid failures) and bottled water consumption, while high-frequency tap water use is significantly predicted by civic and environmental engagement. Furthermore, geographical factors, consistent with Zapata (2021), reflect persistent local habits and trust perceptions. The results underscore a “consumption paradox†, rooted in a crisis of trust and alignment with non-economic values, rather than in simple cost convenience. |
| JEL: | D12 D81 Q50 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:srt:wpaper:0826 |
| By: | Oihane Gallo |
| Abstract: | We analyze the problem of locating a public facility on a line in a society where agents have either single-peaked or single-dipped preferences. We focus on the domain introduced by Alcalde-Unzu et al. (2024), in which the type of preference of each agent is public information, but the location of her peak or dip, as well as the rest of the preference are unknown. We characterize all strategy-proof and type-anonymous social choice rules on this domain. The first characterization identifies the additional constraints that type- anonymity imposes on the class of strategy-proof rules described in Alcalde-Unzu et al. (2024). The second one generalizes existing results in a two-step procedure as follows: In the first step, the rule computes the median of the reported peaks together with a fixed set of locations (Moulin, 1980) leading to either a single alternative or a pair of contiguous alternatives. In the second step, applied only when the first step yields a pair, we use a double-quota majority method to select between the two alternatives of the pair (Moulin, 1983). Finally, we establish that these two characterizations are equivalent. |
| Keywords: | anonymity, single-dipped preferences, Single-peaked preferences, social choice rule, strategy-proofness |
| JEL: | D70 D71 D79 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:bge:wpaper:1563 |
| By: | Anders Karlstr\"om; Christer Persson |
| Abstract: | Models of bounded rationality include quantum--like (QL) models, which use Hilbert--space amplitudes to represent context and order effects, and entropy--regularised (ER) models, including rational inattention, which smooth expected utility by adding an information cost. We develop a unified information--geometric framework in which both arise from the same structure on the probability simplex. Starting from the Fisher--Rao geometry of the open simplex $\Delta^{n-1}$, we formulate \emph{least--action rationality} (LAR) as a variational principle for decision dynamics in amplitude (square--root) coordinates and lift it to the cotangent phase space $N:=T^*\mathbb R^n$ of unnormalised amplitudes. The lift carries its canonical symplectic form and a para--K\"ahler geometry. For a linear evaluator $\widehat V=\widehat S+\widehat F$ with symmetric part $\widehat S$ and skew part $\widehat F$, the dynamics separate an evaluative channel from a circulatory (co--utility) channel. On a distinguished zero--residual Lagrangian leaf the flow closes as a split--complex (hyperbolic) Schr\"odinger--type evolution, and observable probabilities follow from a quadratic (Born--type) normalisation. When reduced to the simplex, the induced preference one--form decomposes into an exact utility component and a divergence--free co--utility component whose curvature measures path dependence. Context effects, order effects, and interference--like deviations from the law of total probability emerge as projections of this latent rational flow. Finally, standard complex (elliptic) quantum dynamics arises within this real symplectic phase space by imposing an additional K\"ahler polarisation that restricts admissible variations. Unitary evolution is thus a coherent restriction of the underlying least--action framework rather than a primitive postulate. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.01785 |
| By: | Chun Pang Chow; Hiroyuki Kasahara; Yoichi Sugita |
| Abstract: | We establish nonparametric identification of production functions, total factor productivity (TFP), price markups, and firms' output prices and quantities, as well as consumer demand, using firm-level revenue data, without observing output quantity, in a monopolistically competitive environment with a fully nonparametric demand system. This result overturns the widely held view -- formalized by Bond, Hashemi, Kaplan, and Zoch (2021) -- that output elasticities and markups are not nonparametrically identifiable from revenue data without quantity information. Under the additional restriction that demand satisfies the homothetic single-aggregator (HSA) structure of Matsuyama and Ushchev (2017), we further nonparametrically identify the representative consumer's utility function from firm-level revenue data. This new identification result enables counterfactual welfare analysis without parametric assumptions on preferences. We propose a semiparametric estimator that is feasible for standard firm-level datasets under a Cobb--Douglas production specification. Monte Carlo simulations show that the estimator performs well, while treating revenue as output induces substantial bias. Applying the estimator to Chilean manufacturing data, we reject the CES specification in favor of HSA, and find that market power reduces welfare by approximately 3%--6% of industry revenue in the three largest manufacturing industries in 1996. |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.01492 |
| By: | Haeringer, Guillaume; Nguyen, Lan; placido, Latitia; Ravaioli, Silvio |
| Abstract: | We study how different framings of otherwise equivalent information affect school choice under uncertainty. In an online experiment, subjects repeatedly submitted rank-ordered lists of schools knowing only a probability distribution over their own score. Admission depended solely on whether the score exceeded exogenous school cutoffs. Across rounds, subjects varied in “type” (advantaged/disadvantaged score distributions) and faced one of four information treatments: a control (score distribution only), ex-ante admission probabilities, simulated ex-post composition statistics, and composition statistics based on actual choices of prior participants. We find that information framing has large and heterogeneous effects. Advantaged students react strongly to both ex-ante and ex-post information, becoming more cautious under probability information and more ambitious under composition information; disadvantaged students respond more weakly and only under specific cutoff environments. Ex-ante information significantly reduces segregation between advantaged and disadvantaged types. Our results highlight that the impact of information depends critically on student type and market competitiveness, implying that effective information policies must be carefully tailored to their intended beneficiaries. |
| Keywords: | School choice, Uncertainty, Information, Segregation |
| JEL: | C78 D78 I24 |
| Date: | 2026–01–19 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:127870 |
| By: | Julia Manso |
| Abstract: | Upon taking office in late 2012, Chinese President Xi Jinping launched one of the most intensive anticorruption campaigns in the history of the People's Republic of China. Prior to the campaign, China's land market suffered from corruption, particularly surrounding sale method selection (auction versus listing). Listing is a two-stage sale mechanism that prior research has identified as more susceptible to corruption, leading to lower prices. This paper examines the campaign's impact on land allocation, focusing on whether corruption influences the choice of sale method and, in turn, land sale prices. This paper is the first to utilize Blackwell and Yamauchi (2021, 2024)'s marginal structural model with fixed effects in the inverse probability of treatment weighting model; absorbing time-invariant unobserved confounding and utilizing a set of time-varying covariates as controls, this model can estimate causal effects in the land sale case. I find that indictments in a prefecture cause a statistically significant drop in the probability that land is sold via listing$\unicode{x2014}$an effect that is further compounded when indictments occur in consecutive months. Sensitivity analyses indicate that any violations of the identification assumptions would bias estimates towards zero, confirming the negative effect. A second marginal structural model shows that both mean and median land sale prices increase in the presence of indictments. Together, these results suggest that the anticorruption campaign not only deterred actual corrupt allocation practices, but also impacted the discretionary use of listings. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2603.00291 |
| By: | Antoine Burg (CEREMADE - CEntre de REcherches en MAthématiques de la DEcision - Université Paris Dauphine-PSL - PSL - Université Paris Sciences et Lettres - CNRS - Centre National de la Recherche Scientifique, SCOR SE [Paris]); Christophe Dutang (ASAR - Applied Statistics And Reliability - ASAR - LJK - Laboratoire Jean Kuntzmann - Inria - Institut National de Recherche en Informatique et en Automatique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - UGA - Université Grenoble Alpes) |
| Abstract: | The maximum likelihood estimator (MLE) remains the most frequently used method to estimate the parameters of generalized linear models. But even for distributions within the exponential family, MLEs are not always tractable and need to be computed with time consuming numerical methods like the Iterative Weighted Least Square algorithm. In order to improve the computation time, closed-form estimators have been found in case of categorical explanatory variables for univariate random variables of one-parameter exponential type. In the context of multivariate generalized linear models (MGLM), we propose a new way to look at the score in case of single categorical variables for any distribution in the exponential family. Firstly, we derive closed-form MLE for MGLM assuming multinomial and negative multinomial distributions. Secondly, we deduce similar results for the multivariate normal distributions. For the Dirichlet distribution, we propose a closed-form estimator, yet not MLE, for which we prove the consistency. We illustrate the computation time gains on simulated datasets: closed-form estimators are about 1000 times faster, especially for high dimension. Closed-form estimators are computed in constant times.. Finally, we show the relevancy of the proposed estimator on real-world datasets by modeling cause-of-death mortality in US. We are able to catch the first-order effects of covid between 2019 and 2021. |
| Keywords: | maximum likelihood estimation, multi-parameter exponential family, closed-form estimators, computation time, actuarial mortality model |
| Date: | 2026–02–28 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05539060 |
| By: | Cécile Bazart (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier); Aurélie Bonein (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique); Thierry Blayac (CEE-M - Centre d'Economie de l'Environnement - Montpellier - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - Institut Agro Montpellier - Institut Agro - Institut national d'enseignement supérieur pour l'agriculture, l'alimentation et l'environnement - UM - Université de Montpellier) |
| Abstract: | Trop d'impôt tue l'impôt », dit la célèbre phrase de l'économiste états-unien Arthur Laffer. Et si pour la France, c'était plus compliqué que cela ? N'y a-t-il pas d'autres considérations sociales, affectives ou morales ? |
| Date: | 2026–03–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05533011 |