Frame-dependent Random Utility

Paul H. Y. Cheung; Yusufcan Masatlioglu

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arXiv · 2502.00209

Frame-dependent Random Utility

Paul H. Y. Cheung·Yusufcan Masatlioglu

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Abstract

We explore the influence of framing on decision-making, where some products are framed (e.g., displayed, recommended, endorsed, or labeled). We introduce a novel choice function that captures observed variations in framed alternatives. Building on this, we conduct a comprehensive revealed preference analysis, employing the concept of frame-dependent utility using both deterministic and probabilistic data. We demonstrate that simple and intuitive behavioral principles characterize our frame-dependent random utility model (FRUM), which offers testable conditions even with limited data. Finally, we introduce a parametric model to increase the tractability of FRUM. We also discuss how to recover the choice types in our framework.

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Paul H. Y. Cheung, Yusufcan Masatlioglu. 2025-01-31. Frame-dependent Random Utility. https://arxiv.org/abs/2502.00209

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