Nontransitive Preferences and Stochastic Rationalizability: A Behavioral Equivalence
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Nontransitive choices have long been an area of curiosity within economics. However, determining whether nontransitive choices represent an individual's preference is a difficult task since choice data is inherently stochastic. This paper shows that behavior from nontransitive preferences under a monotonicity assumption is equivalent to a transitive stochastic choice model. In particular, nontransitive preferences are regularly interpreted as a strength of preference, so we assume alternatives are chosen proportionally to the nontransitive preference. One implication of this result is that one cannot distinguish ``complementarity in attention" and ``complementarity in demand."
Original language | English |
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DOIs | |
Publication status | Published - 28 Apr 2023 |
- econ.TH
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ID: 347963490