Publication Type

Journal Article

Version

acceptedVersion

Publication Date

12-2017

Abstract

In this paper, we study the relationship between several well known classes of discrete choice models, i.e., the random utility model (RUM), the representative agent model (RAM), and the semiparametric choice model (SCM). Using a welfare-based model as an intermediate, we show that the RAM and the SCM are equivalent. Furthermore, we show that both models as well as the welfare-based model strictly subsume the RUM when there are three or more alternatives, while the four are equivalent when there are only two alternatives. Thus, this paper presents a complete picture of the relationship between these choice models.

Keywords

welfare function, random utility model, representative agent model, semiparametric choice model

Discipline

Operations and Supply Chain Management

Research Areas

Operations Management

Publication

Operations Research

Volume

65

Issue

6

First Page

1516

Last Page

1525

ISSN

0030-364X

Identifier

10.1287/opre.2017.1602

Publisher

INFORMS (Institute for Operations Research and Management Sciences)

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1287/opre.2017.1602

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