Open AccessGradual pairwise comparison and stochastic choice
Author(s) -
Dutta Rohan
Publication year - 2020
Publication title -
theoretical economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 4.404
H-Index - 32
eISSN - 1555-7561
pISSN - 1933-6837
DOI - 10.3982/te3647
Subject(s) - pairwise comparison , transitive relation , preference , preference relation , similarity (geometry) , mathematical economics , computer science , order (exchange) , econometrics , mathematics , artificial intelligence , economics , statistics , combinatorics , finance , image (mathematics)
Guided by evidence from eye‐tracking studies of choice, pairwise comparison is assumed to be the building block of the decision‐making procedure. A decision‐maker with a rational preference may nevertheless consider the constituent pairwise comparisons gradually, easier comparisons preceding difficult ones. Facing a choice problem, she may be unable to complete all relevant comparisons and choose with equal odds from alternatives not found inferior. Stochastic choice data consistent with such behavior are characterized and used to infer the underlying preference relation and the order of pairwise comparisons. The choice procedure offers a novel rationale for behavioral phenomena such as the similarity effect and violations of stochastic transitivity and regularity.