4.1 Article

General Luce model

期刊

ECONOMIC THEORY
卷 68, 期 4, 页码 811-826

出版社

SPRINGER
DOI: 10.1007/s00199-018-1145-5

关键词

The Luce model; Logit model; Independence of irrelevant alternatives axiom

资金

  1. National Science Foundation [SES 1558757]

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We extend the Luce model of discrete choice theory to satisfactorily handle zero-probability choices. The Luce mode struggles to explain choices that are not made. The model requires that if an alternative y is never chosen when x is available, then there is no set of alternatives from which y is chosen with positive probability. In our model, if an alternative y is never chosen when x is available, then we infer that y is dominated by x. While dominated by x, y may still be chosen with positive probability, when grouped with a comparable set of alternatives.

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