Behavioral Foundations of Nested Stochastic Choice and Nested Logit

• 成果类型: Article
• 署名作者: Kovach, Matthew; Tserenjigmid, Gerelt
• 署名单位: Virginia Polytechnic Institute & State University; University of California System; University of California Santa Cruz
• 刊物名称: JOURNAL OF POLITICAL ECONOMY
• ISSN/ISSBN: 0022-3808
• DOI: 10.1086/720399
• 发表日期: 2022
• 页码: 2411-2461
• 关键词: CALLING PATTERNS; rational choice; models; service

摘要

We provide the first behavioral characterization of nested logit, a foundational and widely applied discrete-choice model, through the introduction of a nonparametric version of nested logit that we call nested stochastic choice (NSC). NSC is characterized by a single axiom that weakens independence of irrelevant alternatives on the basis of revealed similarity to allow for the similarity effect. Nested logit is characterized by an additional menu-independence axiom. Our axiomatic characterization leads to a practical, data-driven algorithm that identifies the true nest structure from choice data. We also discuss limitations of generalizing nested logit by studying the testable implications of cross-nested logit.