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Exogenous Consideration and Extended Random Utility

Roy Allen

arXiv 22 May 2024 · Econometrics

arXiv:2405.13945 · PDF · DOI · OpenAlex · Extracted main text

Abstract

In a consideration set model, an individual maximizes utility among the considered alternatives. I relate a consideration set additive random utility model to classic discrete choice and the extended additive random utility model, in which utility can be $-\infty$ for infeasible alternatives. When observable utility shifters are bounded, all three models are observationally equivalent. Moreover, they have the same counterfactual bounds and welfare formulas for changes in utility shifters like price. For attention interventions, welfare cannot change in the full consideration model but is completely unbounded in the limited consideration model. The identified set for consideration set probabilities has a minimal width for any bounded support of shifters, but with unbounded support it is a point: identification "towards" infinity does not resemble identification "at" infinity.

Citation extraction

49
references
86
in-text mentions
49
distinct cited
2
self-citations
8,644
main-text words

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Most heavily cited references

The works this paper leans on most, across its whole bibliography — not restricted to papers in our corpus. Ranked by composite intensity, which combines how often a work is mentioned, how many sections mention it, and how much of that falls in the main text rather than the appendix.

ReferenceIntensityMentionsSectionsMain text
1Daniel McFadden (1981) Econometric models of probabilistic choice1.00064100%
2Roy Allen and John Rehbeck (2019) Identification with additively separable heterogeneity self1.00054100%
3Levon Barseghyan, Francesca Molinari, and Matthew Thirkettle (2021) Discrete choice under risk with limited consideration0.87462100%
4Jason Abaluck and Abi Adams-Prassl (2021) What do consumers consider before they choose? identification from asymmetric demand responses0.87452100%
5Paola Manzini and Marco Mariotti (2014) Stochastic choice and consideration sets0.81142100%
6Henry David Block and Jacob Marschak (1960) Random orderings and stochastic theories of response0.64422100%
7Mogens Fosgerau, Daniel McFadden, and Michel Bierlaire (2013) Choice probability generating functions0.64422100%
8Srikanth Jagabathula, Dmitry Mitrofanov, and Gustavo Vulcano (2021) Demand estimation under uncertain consideration sets0.64422100%
9Victor H Aguiar (2017) Random categorization and bounded rationality0.51121100%
10Gregory S Crawford, Rachel Griffith, and Alessandro Iaria (2021) A survey of preference estimation with unobserved choice set heterogeneity0.51121100%

Showing the top 10 of 49 scored citations.