A Random Reference Model

• 成果类型: Article
• 署名作者: Kibris, Ozgur; Masatlioglu, Yusufcan; Suleymanov, Elchin
• 署名单位: Sabanci University; University System of Maryland; University of Maryland College Park; Purdue University System; Purdue University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20220089
• 发表日期: 2024
• 页码: 155-209
• 关键词: Stochastic choice; reference points; preferences; attention; DECISION; SALIENCE

摘要

We provide two nested models of random reference -dependent choice in which the reference point is endogenously determined by random processes. Random choice behavior is due to random reference points, even though, from the decision -maker's viewpoint, choices are deterministic. Through a revealed preference exercise, we establish when and how one can identify the reference -dependent preferences and the random reference rule from observed choice data. We also present behavioral postulates that characterize the empirical content of our models. Lastly, we investigate an application of our model to Bertrand competition with differentiated products.