Stochastic Choice with Categorization
نویسنده
چکیده
Observing that people often use categorization to simplify choice problems and follow some search order to make a choice, we develop and axiomatize a stochastic choice model in which the decision maker first categorizes alternatives in a menu into disjoint categories, then search over categories sequentially until making a choice. The model subsumes both the Luce model and the random consideration set rule of Manzini and Mariotti (2014) as special cases. We also develop and axiomatize a variant of the model by excluding the existence of a default option. The elements of both models are uniquely identified. JEL Classification: D01, D81
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