Discrete Choice Models http://lists.repec.org/mailman/listinfo/nep-dcm Discrete Choice Models 2026-03-02 Paying for Peers? Parental Willingness to Pay for School Composition and Quality in Switzerland https://d.repec.org/n?u=RePEc:ces:ceswps:_12457&r=&r=dcm 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. Maria A. Cattaneo Stefan C. Wolter Thea Zöllner discrete choice experiment, willingness to pay, special needs education, school quality 2026 When Music is Made by AI: Effects on Preferences and Willingness to Pay https://d.repec.org/n?u=RePEc:ces:ceswps:_12405&r=&r=dcm Artificial intelligence (AI) is rapidly reshaping society, including the music industry. Recent advancements in generative AI enable users to create music from text-based prompts, raising questions about public perception and valuation of AI-generated music. We conducted three studies with German-speaking participants (Study 1: N=2000, Study 2: N=425; Study 3: N=1248) to explore awareness, enjoyment, and willingness to pay for AI music. After finding no clear rejection of AI composed music in Study 1, Study 2 varied whether listeners knew the music was AI-generated. Study 3 involved regular listeners of pop and electronic dance music, manipulating song origin (human vs. AI) and disclosure. Results show that listeners generally could not distinguish between AI and human-made songs. When unaware, participants slightly preferred AI music and valued it equally. However, disclosing that AI had been used to create compositions reduced appreciation and willingness to pay. We explore how reactions differ by genre and individual attitudes toward AI and discuss implications for the music industry and for regulatory initiatives. Jana Friedrichsen Julia Schwarz Michel Clement artificial intelligence, music, willingness-to-pay, ethics of AI 2026 Identifying Behavioral Types https://d.repec.org/n?u=RePEc:bri:uobdis:26/822&r=&r=dcm We study identification in models of aggregate choice generated by unobserved behavioral types. An analyst observes only aggregate choice behavior, while the populationmdistribution of types and their type-level choice patterns are latent. Assuming only minimal and purely qualitative prior knowledge of the process generating type-level choice probabilities, we characterize necessary and sufficient conditions for identifiability. Identification obtains if and only if the data exhibit sufficient cross-type behavioral heterogeneity, which we characterize equivalently through combinatorial matching conditions between types and alternatives, and through algebraic properties of the matrices mapping type-level to aggregate choice behavior. Christopher Kops Paola Manzini Marco Mariotti Illia Pasichnichenko 2026-01-30 Can virtual reality enhance scope sensitivity? experimental evidence from the Amazon Rainforest https://d.repec.org/n?u=RePEc:ehl:lserod:137101&r=&r=dcm Given the Amazon Rainforest’s ecological importance, accurately valuing its conservation benefits is critical for informed policy decisions. This study compares the efficacy of using immersive virtual reality (VR) and high-quality video presentations to elicit ‘willingness to pay’ (WTP) for conservation activities in the Amazon Rainforest. It examines whether VR elicits valuations of conservation benefits that are sensitive to the scope or scale of conservation (‘scope-sensitive valuations’), and whether any benefits justify its higher cost. It also explores variations within responses to VR to identify experiential factors, such as feeling present in the environment or feeling physically uncomfortable, that moderate scope sensitivity. The study finds that high-quality video presentations generate scope-sensitive willingness to pay (WTP) for Amazon Rainforest conservation as effectively as immersive VR, while offering greater accessibility and lower cost than VR. Chung, Vincent virtual reality; stated preference; contingent valuation; scope sensitivity 2025-11-21 Exploring Choice Errors in Children https://d.repec.org/n?u=RePEc:bri:uobdis:26/823&r=&r=dcm We study experimentally how children’s ability to avoid choice errors develops over time, focusing on both riskless and risky decisions among primary school children. We identify four types of rationality violations: cycles and menu effects in the riskless domain; and dominance and framing effects compatible with correlation neglect in the risky domain. We find that types of violations are correlated within domains but broadly independent across domains. To interpret our results we build and estimate a structural model of limited consideration. We identify an index of error avoidance and study how it develops with age and socioeconomic background, providing a new tool to understand the development of choice errors. Daniele Caliari Valentino Dardanoni Carla Guerriero Paola Manzini Marco Mariotti 2026-01-30 Model Restrictiveness in Functional and Structural Settings https://d.repec.org/n?u=RePEc:arx:papers:2602.07688&r=&r=dcm We generalize the notion of model restrictiveness in Fudenberg, Gao and Liang (2026) to a wider range of economic models with semi/non-parametric and structural ingredients. We show how restrictiveness can be defined and computed in infinite-dimensional settings using Gaussian process priors (including with shape restrictions) and other alternativess in Bayesian nonparametrics. We also extend the restrictiveness framework to structural models with endogeneity, instrumental variables, multiple equilibria, and nonparametric nuisance components. We discuss the importance of the user-specific choice of discrepancy functions in the context of Rademacher complexity and GMM criterion function, and relate restrictiveness to the limit of the average-case learning curve in machine learning. We consider applications to: (1) preferences under risk, (2) exogenous multinomial choice, and (3) multinomial choice with endogenous prices: for (1), we obtain results consistent with those in Fudenberg, Gao and Liang (2026); for (2) and (3), our findings show that nested logit and mixed logit exhibit similar restrictiveness under standard parametric specifications, and that IV exogeneity conditions substantially increase overall restrictiveness while altering model rankings. Drew Fudenberg Wayne Yuan Gao Zhiheng You 2026-02 The price of advice: Experimental evidence on the effects of AI recommenders https://d.repec.org/n?u=RePEc:zbw:cbscwp:336742&r=&r=dcm The integration of large language models (LLMs) into recommender systems (RS) has given rise to a new generation of Conversational RS (CRS). This study asks how CRS systems shape consumer behavior, and, in particular, their spending. Despite the rapid proliferation of such systems, including widely used tools like OpenAI's ChatGPT and Google's Gemini, we still lack evidence on their behavioral effects. This study provides the first controlled empirical test of CRS influence on real purchasing decisions. In a laboratory experiment, complemented by large-scale API studies, participants were randomly assigned to one of four conditions: a traditional search baseline, GPT, Gemini, or a customized GPT designed to steer users toward more expensive products. CRS consistently increase consumer expenditures, with Customized GPT producing the highest average spending. Importantly, these effects are not driven by differences in perceived product quality, prior shopping experience, or generalized trust. Rather, they stem from subtle linguistic framing and increased exposure to premium brands. Taken together, the findings position LLM-based CRS as novel and potent choice architects with downstream implications for consumer protection, market design, and regulatory oversight. Zac, Amit Gal, Michal S. recommendation systems, conversational recommender systems (CRS), largelanguage models (LLMS), LLM-empowered recommendation systems, consumerbehavior, algorithmic choice architecture, algorithmic bias, human-AI shoppinginteraction, trust in CRS, algorithmic regulation 2025 Constrained Pricing under Finite Mixtures of Logit https://d.repec.org/n?u=RePEc:arx:papers:2602.08119&r=&r=dcm The mixed logit model is a flexible and widely used demand model in pricing and revenue management. However, existing work on mixed-logit pricing largely focuses on unconstrained settings, limiting its applicability in practice where prices are subject to business or regulatory constraints. We study the constrained pricing problem under multinomial and mixed logit demand models. For the multinomial logit model, corresponding to a single customer segment, we show that the constrained pricing problem admits a polynomial-time approximation scheme (PTAS) via a reformulation based on exponential cone programming, yielding an $\varepsilon$-optimal solution in polynomial time. For finite mixed logit models with $T$ customer segments, we reformulate the problem as a bilinear exponential cone program with $O(T)$ bilinear terms. This structure enables a Branch-and-Bound algorithm whose complexity is exponential only in $T$. Consequently, constrained pricing under finite mixtures of logit admits a PTAS when the number of customer segments is bounded. Numerical experiments demonstrate strong performance relative to state-of-the-art baselines. Hoang Giang Pham Tien Mai 2026-02 A Theory of Network Games Part 1: Utility Representations https://d.repec.org/n?u=RePEc:arx:papers:2602.16071&r=&r=dcm We demonstrate that a ubiquitous feature of network games, bilateral strategic interactions, is equivalent to having player utilities that are additively separable across opponents. We distinguish two formal notions of bilateral strategic interactions. Opponent independence means that player i's preferences over opponent j's action do not depend on what other opponents do. Strategic independence means that how opponent j's choice influences i's preference between any two actions does not depend on what other opponents do. If i's preferences jointly satisfy both conditions, then we can represent her preferences over strategy profiles using an additively separable utility. If i's preferences satisfy only strategic independence, then we can still represent her preferences over just her own actions using an additively separable utility. Common utilities based on a linear aggregate of opponent actions satisfy strategic independence and are therefore strategically equivalent to additively separable utilities--in fact, we can assume a utility that is linear in opponent actions. Joseph Root Evan Sadler 2026-02 Jackknife Inference for Fixed Effects Models https://d.repec.org/n?u=RePEc:arx:papers:2602.21903&r=&r=dcm This paper develops a general method of inference for fixed effects models which is (i) automatic, (ii) computationally inexpensive, and (iii) highly model agnostic. Specifically, we show how to combine a collection of subsample estimators into a self-normalised jackknife $t$-statistic, from which hypothesis tests, confidence intervals, and $p$-values are readily obtained. Ayden Higgins 2026-02 What Will You Accept? An Analysis of Occupants’ Preferences for Direct Load Control in Residential Buildings https://d.repec.org/n?u=RePEc:ris:fcnwpa:022308&r=&r=dcm The rapid electrification of private heating and mobility increases residential electricity demand and requires new mechanisms to stabilize power grids. Direct load control (DLC) offers a technically effective way to manage demand-side flexibility, yet its acceptance by private households remains uncertain. This study investigates willingness-to-accept (WTA) and preference structures for DLC programs in the German-speaking D-A-CH region (Germany, Austria, Switzerland), using a large-scale survey (N = 10, 346) and a choice-based conjoint experiment. Five core tariff attributes (financial compensation, intervention frequency, intervention duration, controllable technology, and Control Options) were evaluated across socio-economic groups using a hierarchical Bayes model. Financial compensation is found to be the most influential factor, followed by duration and frequency of interventions. Control Options are strongly preferred and associated with negative WTA values, indicating that autonomy substantially increases acceptance. Technology-related differences are found to be small: wallboxes require the highest compensation, while heat pumps and battery storage are generally well accepted. Cross-country differences in WTA are found to be statistically significant but modest, with Germany showing the highest compensation requirements. Socio-economic effects are minor. Overall, households accept DLC when interventions are short, predictable, and transparent, and when users retain basic control. These results suggest that effective DLC programs must combine fair compensation with autonomy safeguards and clear communication to ensure social acceptability. Constanze Liepold Reinhard Madlener Direct load control; Demand-side flexibility; Socio-Economic Status; D-AC-H Region; Discrete Choice Experiment 2025-10-01 What Do LLMs Want? https://d.repec.org/n?u=RePEc:fip:fedgfe:102439&r=&r=dcm Large language models (LLMs) are now used for economic reasoning, but their implicit "preferences" are poorly understood. We study these preferences by analyzing revealed choices in canonical allocation games and a sequential job-search environment. In dictator-style allocation games, most models favor equal splits, consistent with inequality aversion. Structural estimation of Fehr-Schmidt parameters suggests this aversion exceeds levels typically observed in human experiments. However, LLM preferences prove malleable. Interventions such as prompt framing (e.g., masking social context) and control vectors reliably shift models toward more payoff-maximizing behavior, while persona-based prompting has more limited impact. We then extend our analysis to a sequential decision-making environment based on the McCall job search model. Here, we recover implied discount factors from accept/reject behavior, but find that responses are less consistently rationalizable and preferences more fragile. Our findings highlight two core insights: (i) LLMs exhibit structured, latent preferences that often align with human behavioral norms, and (ii) these preferences can be steered, albeit more effectively in simple settings than in complex, dynamic ones. Thomas R. Cook Sophia Kazinnik Zach Modig Nathan M. Palmer Behavioral economics; Game theory; Search and matching models 2026-01-30 Hidden income and its impact on expenditure patterns in Uganda https://d.repec.org/n?u=RePEc:ehl:lserod:137229&r=&r=dcm This study presents quantitative insights into the willingness of women and men to hide income from their spouse, how socio-demographic and psycho-social factors correlate to the willingness to hide income, and how hiding that income influences expenditure patterns. Using data from 422 households in rural Uganda and employing an established revealed preference approach, the Becker-DeGroot-Marschak (BDM) mechanism, we show that both women and men seek to hide income from their spouse at substantial potential cost. We report an average willingness to pay (WTP) of 49% of the endowment offered, with 99% of the participants stating a positive WTP for hidden income. The correlates with demand for hidden income differ in terms of size and significance across genders and include perceived marriage quality, self-control, savings group membership, and empowerment over purchasing decisions. Results show that women who received income in private have a higher public to private spending ratio and higher transfers to their social network. Our study contributes to the literature on intra-household resource allocation in developing countries by studying the demand for hidden income between co-habiting spouses, correlates with the demand for hidden income, and the link between hidden income and subsequent spending patterns in rural Uganda. Arslan, Cansın Gregg, Daniel Stringer, Randy asymmetric information; BDM mechanism; efficiency; gender; hidden income; intra-household 2024-11-30 Consistency of M-estimators for non-identically distributed data: the case of fixed-design distributional regression https://d.repec.org/n?u=RePEc:aiz:louvad:2025021&r=&r=dcm This paper explores strong and weak consistency of M-estimators for non-identically distributed data, extending prior work. Emphasis is given to scenarios where data is viewed as a triangular array, which encompasses distributional regression models with non-random covariates. Primitive conditions are established for specific applications, such as estimation based on minimizing empirical proper scoring rules or conditional maximum likelihood. A key motivation is addressing challenges in extreme value statistics, where parameter-dependent supports can cause criterion functions to attain the value −∞, hindering the application of existing theorems. Bücher, Axel Segers, Johan Staud, Torben Block-Maxima Method ; Conditional Maximum Likelihood ; Distributional Regression ; Minimum Scoring Rule Estimation ; Non-Random Covariates 2025-11-17 Aligning community and public priorities in informal settlement upgrading: Evidence from discrete choice experiments in Indonesia https://d.repec.org/n?u=RePEc:mhe:chemon:2026-02&r=&r=dcm This study employs two discrete choice experiments (DCEs) conducted with two sample groups in Indonesia to investigate the informal settlement upgrading priorities of residents (sample 1) and explore how they align with public taxpayers’ preferences (sample 2). The first DCE explores the relative importance placed upon common planning and public health priorities, such as water security, drainage, and diarrhoea in children, alongside local economic development priorities. The second DCE investigates the relative importance placed upon project implementation design considerations, including project completion time and community consultation. Our findings reveal that residents particularly prioritise improvements in water quality and economic development. While informal settlement upgrading interventions often prioritise improving water, sanitation and hygiene (WaSH) to reduce diarrhoea and other water-borne disease, our study highlights that residents also highly value economic empowerment, underscoring the need for integrated upgrading approaches that address both health and livelihood concerns. Taxpayer perspectives were well-aligned on upgrading outcome priorities, but diverged slightly on project implementation. Whereas residents prioritized minimizing project duration and were less concerned with significant community consultation, taxpayers emphasized generating employment opportunities for residents within project designs. Both groups expressed an aversion to residents bearing full responsibility for resourcing ongoing operations and maintenance, preferring government or shared responsibility, highlighting the need for sustainable funding models. The study highlights the value of DCEs as a tool to support locally-led development, informing upgrading strategies that are more likely to be both politically feasible and successfully appropriated into urban livelihood practices of residents. Rohan Sweeney Farzana Hossain Jumriani Ansar Indra Dwinata Sitti Andriani Anwar Arlyani Risal Gang Chen Michaela F. Prescott S Fiona Barker Karin Leder Ansariadi Ansariadi David W. Johnston informal settlements, slum upgrading, infrastructure appropriation, locally-led development, discrete choice experiment 2026-02 Electric Vehicle Driver Activities, Non-Charging Expenditures, and Experiences Using Fast Chargers in California https://d.repec.org/n?u=RePEc:cdl:itsdav:qt0jm16498&r=&r=dcm Public direct current fast charging (DCFC) infrastructure is in an early stage of development, depends on public funding, may not be profitable, and its locations may not provide the amenities that consumers want to use while charging. This report explores topics related to these issues: what activities battery electric vehicle (BEV) drivers participate in, BEV drivers’ spending on charging and other items while at a DCFC, drivers’ self-reported preferences for amenities at DCFC, and drivers’ reported experiences using DCFC. The results reveal most drivers do something other than using DCFC while charging their BEV; close to half of respondents purchase something other than electricity for their BEV, and this expenditure is higher than the average cost of a charging session. The results highlight the potential for charging providers to explore new ways of generating revenue directly by developing stations with revenue-generating amenities attached, or through symbiotic relationships between charging providers and businesses such as stores, restaurants, and coffee shops. Hardman, Scott PhD Senthil, Sonali Li, Jiewei Grant Jenn, Alan PhD Engineering, Electric vehicle charging, Electric vehicles, Service stations, Consumer behavior, Surveys 2026-02-01 Economic Diversity and the Resilience of Cities https://d.repec.org/n?u=RePEc:fip:fedgif:102438&r=&r=dcm We develop a framework to assess how economic shocks affect local labor markets and worker welfare, with a focus on city-level economic diversity. Using detailed worker flow data across cities, sectors, and occupations, we construct theory-consistent welfare measures. Our approach combines a dynamic discrete choice model with a dual representation that captures both direct effects and the insurance value of local economic diversity. Applied to French labor markets, we find that diversification dampens the effect of negative shocks: both job-to-job moves and net inflows decline less in diverse cities than in concentrated ones. Overall, we document sizable welfare insurance gains from local economic diversity. Francois de Soyres Simon Fuchs Illenin O. Kondo Helene Maghin sufficient statistic; labor flows; concentration; economic diversity; welfare 2025-12-12 How well do voting choice policies represent investor preferences? https://d.repec.org/n?u=RePEc:zbw:cbscwp:336738&r=&r=dcm Asset managers face increasing political risk stemming from concerns that they prioritize their own interests when voting on behalf of investors. Using survey evidence and structural estimation, we provide early evidence on how well asset managers represent their investors by studying the ideological alignment between the two in the initial implementation of "voting choice policies." These policies allow investors in mutual funds and ETFs a limited menu of options to express their preferences on how fund managers vote their shares in corporate proxy contests. We conduct an original survey to measure investors' preferences on management and shareholder proposals and assess how well voting choice policies agree with these preferences. Using this survey data, we structurally estimate the ideological locations of investors and compare them to those of the voting choice policies. Our structural estimation includes ideological weighting to account for variation in relative importance of different ESG topics. We find that voting choice policies are clustered in the first and third dimensions of the ideological space. These correspond to left-right preferences and the willingness to implement socially conservative restrictions on the agency of the firm's managers. The addition of a simple new voting choice policy, which supports the positions of a majority of survey respondents, can increase investor-policy alignment. Montagnes, B. Pablo Peskowitz, Zachary Sridharan, Suhas A. 2025 Do market forces erode moral actions? Re-visiting Dewatripont and Tirole (2024) https://d.repec.org/n?u=RePEc:nam:defipp:2603&r=&r=dcm Dewatripont and Tirole (2024) show that firms’ moral conduct in the market is independent of competitive pressure. We argue that such a result critically hinges on the assumption of perfect information about the firms’ moral actions —an assumption that is, in general, unlikely to hold. Specifically, the number of firms and their size matter if consumers have only a general perception of morality in the market. In such a setting, morality becomes a public good: firms bear the full cost of their moral behaviour while capturing only a fraction of the benefits from increased consumer willingness to pay. Jean-Marie Baland Giorgio Ferroni 2026-02