Author:
Cerreia-Vioglio S.,Maccheroni F.,Marinacci M.,Rustichini A.
Abstract
AbstractWe consider random choice rules that, by satisfying a weak form of Luce’s choice axiom, embody a form probabilistic rationality. We show that for this important class of stochastic choices, the law of demand for normal goods—arguably the main result of traditional consumer theory—continues to hold on average when strictly dominated alternatives are dismissed.
Funder
prin
Università Commerciale Luigi Bocconi
Publisher
Springer Science and Business Media LLC
Subject
Computer Science Applications,General Economics, Econometrics and Finance,General Social Sciences,Applied Psychology,Arts and Humanities (miscellaneous),Developmental and Educational Psychology,General Decision Sciences