A Separability Foundation for Random Coefficients Logit

Fedor Sandomirskiy; Po Hyun Sung; Omer Tamuz; Ben Wincelberg

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arXiv · 2312.04827

A Separability Foundation for Random Coefficients Logit

Fedor Sandomirskiy·Po Hyun Sung·Omer Tamuz·Ben Wincelberg

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Abstract

We study stochastic choice across decision problems, each represented as a menu of action labels paired with observable outcome vectors. We propose a consistency condition for behavior in decision problems composed of two separable components: choice probabilities must agree with those obtained when each component is considered in isolation. Together with monotonicity and continuity, this separability requirement characterizes the family of random coefficients logit rules.

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Fedor Sandomirskiy, Po Hyun Sung, Omer Tamuz, Ben Wincelberg. 2023-12-08. A Separability Foundation for Random Coefficients Logit. https://arxiv.org/abs/2312.04827

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