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Monotone stochastic choice models: The case of risk and time preferences

Abstract:

Suppose that, when evaluating two alternatives x and y by means of a parametric utility function, low values of the parameter indicate a preference for x and high values indicate a preference for y. We say that a stochastic choice model is monotone whenever the probability of choosing x is decreasing in the preference parameter. We show that the standard use of random utility models in the context of risk and time preferences may sharply violate this monotonicity property, and argue that thei...

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Publication status:
Published
Peer review status:
Peer reviewed

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Publisher copy:
10.1086/695504

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Institution:
University of Oxford
Division:
SSD
Department:
Economics
Role:
Author
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Name:
Spanish Ministry of Science and Innovation
Grant:
ECO2014-56154
More from this funder
Name:
European Regional Development Fund
Publisher:
University of Chicago Press
Journal:
Journal of Political Economy More from this journal
Volume:
126
Issue:
1
Pages:
74-106
Publication date:
2018-01-16
Acceptance date:
2016-08-09
DOI:
EISSN:
1537-534X
ISSN:
0022-3808
Keywords:
Pubs id:
pubs:652791
UUID:
uuid:fc424f4a-4537-4e93-a3a0-29ede24df346
Local pid:
pubs:652791
Source identifiers:
652791
Deposit date:
2016-10-17

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