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on Discrete Choice Models |
| By: | Wojciech Zawadzki (Faculty of Economic Sciences, University of Warsaw); Henrik Andersson (Swedish National Road and Transport Research Institute (VTI); Toulouse School of Economics, University of Toulouse Capitole); Mikołaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Arne Risa Hole (Universitat Jaume I) |
| Abstract: | This study investigates how behavioral biases influence stated preference valuation of mortality risk reductions, commonly summarized as the value of a statistical life (VSL). Using a discrete choice experiment (DCE) combined with a contingent valuation double-bounded dichotomous choice and an open-ended follow-up, we elicit individuals’ willingness to pay (WTP) for cardiovascular mortality risk reductions. In a randomized design, we varied the cost attribute across three cost range treatments and manipulated information disclosure and feedback to examine three behavioral phenomena: cost vector effects (whether the range of costs presented affects WTP), scope insensitivity (whether WTP scales appropriately with the magnitude of the risk reduction), and anchoring (whether initial cost cues affect subsequent responses). Our results show that mean VSL estimates can vary by up to ~25% between cost treatments. Furthermore, WTP responses exhibit partial scope insensitivity – larger risk reductions do not proportionally increase WTP – indicating a deviation from theoretical expectations. Importantly, we find no strong evidence of anchoring: neither revealing all attribute levels upfront, nor starting with extreme cost levels, nor providing feedback on quiz questions significantly affected respondents’ choices or WTP. Our findings underscore the need for careful survey design. Even if VSL distributions remain statistically similar across cost frames, substantial shifts in mean magnitudes could be consequential for policy. We call for standardized guidelines on cost attribute selection and survey protocols to mitigate bias, ensuring that stated preference methods yield reliable welfare estimates for health policy decisions. |
| Keywords: | value of statistical life (VSL), stated preference (SP), contingent valuation (CV), behavioral biases, anchoring effect, scope insensitivity, discrete choice experiment (DCE), willingness to pay (WTP), mortality risk reduction, cardiovascular diseases |
| JEL: | I12 D01 D61 Q51 C83 C93 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:war:wpaper:2026-4 |
| By: | Cattaneo, Maria (Swiss Coordination Centre for Research in Education); Wolter, Stefan (University of Bern); Zöllner, Thea (University of Bern) |
| Abstract: | Switzerland features strong socio-economic segregation and no formal school choice, making residential relocation the only channel through which parents can access preferred schools. Identifying how parents value school attributes is therefore essential but challenging, given that choices bundle multiple characteristics. We address this by conducting a discrete choice experiment with nearly 2, 700 parents with school-aged children, allowing us to estimate willingness to pay (WTP) for individual and combined school attributes. We find that a substantial minority of parents value academic quality so highly that their preferences are effectively price-insensitive. Among price-sensitive parents, academic quality remains central, but they also exhibit positive WTP for schools with fewer students with special educational needs and fewer non-native-speaking peers. Interaction effects are strong: WTP for reductions in special-needs peers is highest if the school is among the academically strongest. Accounting for attribute interactions further reveals marked heterogeneity, with parents clustering into seven distinct preference types. |
| Keywords: | discrete choice experiment, willingness to pay, special needs education, school quality |
| JEL: | C4 H4 I20 I24 |
| Date: | 2026–03 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18393 |
| By: | Peter Caradonna; Christopher Turansick |
| Abstract: | We characterize the identified sets of a wide range of stochastic choice models, including random utility, various models of boundedly-rational behavior, and dynamic discrete choice. In each of these settings, we show two distributions over choice rules are observationally equivalent if and only if they can be obtained from one another via a finite sequence of simple swapping transforms. We leverage this to obtain complete descriptions of both the defining inequalities and extreme points of these identified sets. In cases where choice frequencies vary smoothly with some parameters, we provide a novel global-inverse result for practically testing identification. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.19950 |
| By: | Joanna Mazurkiewicz; Jakub Soko³owski; Bartosz Jusypenko |
| Abstract: | The report assesses Poland’s updated National Energy and Climate Plan by combining an analysis of energy and climate security risks with new evidence on public preferences regarding the transition. We relate four risk dimensions (geopolitical, affordability, reliability, and sustainability) to the NECP’s targets and measures. The analysis is complemented by a survey and a discrete choice experiment that identifies preferences over trade-offs involving climate impacts, fossil-fuel imports, and the distribution of transition costs and benefits. The results indicate that the key issue is not only raising target ambition, but also the trajectory, feasibility, and durability of implementation. Affordability is the most sensitive area: public acceptance of policy depends on cost resilience and perceived fairness. The findings also point to the need for a broader understanding of security that captures households’ exposure to price-volatility risk and helps explain public attitudes toward energy and climate policy. |
| Keywords: | NECP, energy security, energy affordability, social acceptance, energy transition, Poland |
| JEL: | Q48 Q58 H23 D78 C93 |
| Date: | 2026–01 |
| URL: | https://d.repec.org/n?u=RePEc:ibt:report:rr012026 |
| By: | Sergey K. Nigai |
| Abstract: | This paper develops a tractable framework in which heterogeneity, captured by the distribution of agent characteristics within an alternative (sector, location, or occupation), emerges endogenously in equilibrium through selection rather than being imposed exogenously. I show that widely used extreme-value and power-law distributions arise as conditional outcomes of payoff-based discrete choice with multivariate shocks. The framework delivers a one-to-one mapping between equilibrium allocation shares and within-alternative heterogeneity. Because distributions are equilibrium objects, they respond to counterfactual shocks, introducing adjustment margins absent from standard models and generating richer responses, as shown in applications to trade, economic geography, and occupational sorting. |
| Keywords: | endogenous distributions, endogenous heterogeneity, international trade, fréchet distribution, dagum distribution, heavy-tailed distributions, economic geography, selection |
| JEL: | F10 F20 R12 C6 |
| Date: | 2026 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12461 |
| By: | Federico Echenique; Teddy Mekonnen; M. Bumin Yenmez |
| Abstract: | We develop a general framework for incorporating distributional preferences in market design. We identify the structural properties of these preferences that guarantee the path independence of choice rules. In decentralized settings, a greedy rule uniquely maximizes these preferences; in centralized markets, the associated deferred-acceptance mechanism uniquely implements them. This framework subsumes canonical models, such as reserves and matroids, while accommodating complex objectives involving intersectional identities that lie beyond the scope of existing approaches. Our analysis provides unified axiomatic foundations and comparative statics for a broad class of distributional policies. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.08035 |
| By: | Felipe A. Csaszar; John C. Eklund |
| Abstract: | The long-standing unitary-actor assumption in strategy research -- treating firms as monolithic entities with coherent preferences -- misses that organizations are coalitions of individuals with diverse and often conflicting goals. Although behavioral perspectives have challenged this assumption, the field lacks an operational method for deriving an organizational utility function from the disparate preferences of its members and the specific structures used to aggregate them. We develop a mathematical framework that (i) maps individual utility functions into choice probabilities via a random-utility model, (ii) combines those probabilities using an explicit aggregation structure (e.g., unanimity or polyarchy), and (iii) recovers an organizational utility function that rationalizes the collective behavior. This establishes organizational utility functions as operationally meaningful: they summarize and predict organizational choice, yet are generally not simple averages of members' utilities. Instead, aggregation structures systematically reshape preferences -- unanimity approximates the pointwise minima of underlying utility functions, amplifying risk aversion; polyarchy approximates the pointwise maxima, promoting risk-seeking. We illustrate strategic implications in Cournot competition and principal-agent settings, showing how internal aggregation structures shift competitive and collaborative outcomes. Overall, the framework provides a parsimonious way to retrofit unitary-actor models with behaviorally grounded organizational preferences, reconciling the coalition view of the firm with rigorous and tractable strategic analysis. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.20518 |
| By: | Xi Wang |
| Abstract: | Distributional effects, characterized by quantile frameworks, are well-known to capture heterogeneous impacts of economic factors across the unobserved relative ranks. Censored outcome, endogenous regressor and heteroskedastic error are prevalent in empirical work, yet challenge the consistency of existing quantile estimation methods. This paper develops a Sequential Control Function Censored Quantile (SCFCQ) estimator for distributional effects in censored quantile models with unbounded endogenous regressors. Our method combines the sequential analysis with the control function approach, particularly adapting for conditional heteroskedasticity in the endogenous regressor. The estimation algorithm is a two-step procedure composed of series quantile regressions, thereby providing applied researchers with a computationally tractable and practically feasible tool. We apply the SCFCQ method to estimate heterogeneous income elasticities over household preferences using data from the UK Family Expenditure Survey. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.19279 |
| By: | Alfio Giarlotta; M. Ali Khan; Angelo Enrico Petralia; Francesco Reito |
| Abstract: | In mainstream neoclassical economics, utility maximization is the only engine of individual action, and the other or the social, if it is modeled for decisions deemed fundamental, it is done as a tacit externality parameter affecting an agent's maximized payoff. And even when hitched to a social reference point, a fully decisive and immediate response is invariably assumed. In this paper, we propose a non-standard articulation of the trade-off between personal utility and social distance, one motivated by experimental evidence from psychology, management science, and economics. Our approach deconstructs non-recurrent consumer choice to two stages: a non-decisive first stage in which a binary relation, called one-many ordering, yields an interval, the consideration set, to which the deferred choice is confined; a decisive second stage in which the distance from the average social choice, and future social expectations, are taken into account in present utility. Finally, we embed this indecisive consumer in an exploratory game-theoretic setting, and show that indecisiveness and choice deferral may cause social loss. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.14631 |
| By: | Christian Gschwendt; Martina Viarengo; Thea S. Zoellner |
| Abstract: | The economic impact of technological change will critically depend on how future workers invest in their human capital. Yet, little is known about how future workers themselves evaluate and choose their educational and occupational paths in light of emerging technologies. This paper examines how adolescents currently at the school-to-work transition stage value working with generative artificial intelligence (GenAI) in their future occupations, and how automation risk and opportunities for continuing education shape these preferences. We field a discrete-choice experiment among a nationally representative sample of over 7, 000 Swiss adolescents aged around 15. We find that adolescents generally exhibit an aversion to collaborating with GenAI at work, with females consistently more averse than males. However, preferences are nuanced: adolescents welcome greater GenAI collaboration, provided that GenAI usage levels remain moderate and that it is not accompanied by increases in job-automation risk. Finally, continuing education opportunities in occupations improve attitudes towards working with GenAI across genders. Our results challenge simple narratives of technology acceptance or rejection, revealing that adolescents' willingness to work with GenAI depends on how it is implemented — its intensity, associated displacement risks, and accompanying skill development - rather than the technology itself. Our findings suggest that the way future workers value GenAI collaboration in their career choices critically depends on its intensity and on the interplay with automation risk and AI-related educational opportunities. |
| Keywords: | occupational choice, gender gaps, GenAI, choice experiment, continuing education, automation risk |
| JEL: | I24 J24 O33 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:iso:educat:0251 |
| By: | Jo Blanden; Oliver Cassagneau-Francis; Lindsey Macmillan; Gill Wyness |
| Abstract: | Bolder applications mean that private school pupils end up at better universities than their exam results predict |
| Keywords: | Social mobility, Wages, Schools, Higher Education |
| Date: | 2026–02–20 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepcnp:724 |
| By: | Lentz, Rasmus (University of Wisconsin-Madison); Maibom, Jonas (Aarhus University); Moen, Espen (BI Norwegian Business School) |
| Abstract: | We present a tractable, hybrid framework that nests random and perfectly directed search, in which workers are more likely to direct their search toward submarkets with higher returns, while still searching in inferior submarkets with positive probability. The choice of submarket is governed by a logit choice model with noise parameter μ ∈ [0, ∞). In the respective limits, search becomes either completely random or perfectly directed. We characterize the model equilibrium and show that even the perfectly directed search limit is inefficient, in contrast to its otherwise close cousin, competitive search. We proceed to quantify the extent of directedness on Danish matched employer–employee data. Identification relies on the insight that the two benchmark models differ qualitatively in their implications for job-to-job worker reallocation. We find evidence of substantial directedness in search. Finally, we study the implications for underinvestment due to holdup problems and show that the observed degree of directedness substantially reduces underinvestment relative to a setting with random search. |
| Keywords: | partly directed search, structural estimation, efficiency |
| JEL: | J62 J63 D83 D4 |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18375 |
| By: | Federico A. Bugni; Joel L. Horowitz; Linqi Zhang |
| Abstract: | The BLP model is the workhorse framework in empirical IO and enables estimation of demand models for differentiated products using aggregate product shares. In practice, however, the share of the outside good is often unobserved. This paper studies identification and inference in the BLP model when the share of the outside good is unobserved. We show that the model is partially identified, and we derive sharp identified sets for structural parameters and equilibrium objects. We also develop inference procedures based on moment inequalities that deliver valid confidence sets for these structural parameters and equilibrium objects. |
| Date: | 2026–02 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2602.19154 |