Blavatskyy, Pavlo R. and Pogrebna, Ganna. (2009) Models of stochastic choice and decision theories : why both are important for analyzing decisions. Journal of Applied Econometrics, Vol.25 (No.6). pp. 963-986. ISSN 0883-7252

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Abstract

We select a menu of seven popular decision theories and embed each theory in five models of stochastic choice, including tremble, Fechner and random utility model. We find that the estimated parameters of decision theories differ significantly when theories are combined with different models. Depending on the selected model of stochastic choice we obtain different rankings of decision theories with regard to their goodness of fit to the data. The fit of all analyzed decision theories improves significantly when they are embedded in a Fechner model of heteroscedastic truncated errors or a random utility model.

Item Type:	Journal Article
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HM Sociology J Political Science > JC Political theory
Divisions:	Faculty of Social Sciences > Economics
Journal or Publication Title:	Journal of Applied Econometrics
Publisher:	Wiley-Blackwell Publishing, Inc
ISSN:	0883-7252
Official Date:	October 2009
Volume:	Vol.25
Number:	No.6
Number of Pages:	24
Page Range:	pp. 963-986
Identification Number:	10.1002/jae.1116
Status:	Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Restricted or Subscription Access
Funder:	Fund for Support of Academic Development at the University of Zurich
URI:	http://wrap.warwick.ac.uk/id/eprint/45589

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